ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Individuals, businesses and governments are all affected by the problem of scarcity.

Detailed explanation-2: -Scarcity affects the monetary value people place on goods and services and how governments and private firms decide to distribute resources.

Detailed explanation-3: -Scarcity affects society in every way. First and foremost, scarcity affects the way that individuals make choices. Time and money are two examples of scarce resources that we make choices with every day.

Detailed explanation-4: -Why do all societies face the problem of scarcity? All societies face scarcity because all have unlimited wants and needs with limited resources. What basic choices are faced by all societies? Each society must decide what to produce, how to produce it, and for whom to produce it.

Detailed explanation-5: -Societies can deal with scarcity by increasing supply. The more goods and services available to all, the less scarcity there will be. Of course, increasing supply comes with limitations, such as production capacity, land available for use, time, and so on. Another way to deal with scarcity is by reducing demand.