ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Individuals and societies are forced to make choices because most resources are scarce. Economics is the study of how individuals and societies choose to allocate scarce resources, why they choose to allocate them that way, and the consequences of those decisions.

Detailed explanation-2: -Scarcity forces all of us to make choices by making us decide which options are most important to us. The principle of scarcity states that there are limited goods and services for unlimited wants. Thus, people need to make choices in order to satisfy the wants that are most important to them.

Detailed explanation-3: -Economics is about making choice in presence of scarcity because of the fact that our wants are unlimited and the resources to fulfil them are limited . so we have to make choice between the scarce resources, therefore we can say that the economics is about making choice in scarcity.

Detailed explanation-4: -Scarcity refers to the finite nature and availability of resources while choice refers to people’s decisions about sharing and using those resources. The problem of scarcity and choice lies at the very heart of economics, which is the study of how individuals and society choose to allocate scarce resources.

Detailed explanation-5: -Scarcity affects methods of production by contributing important information for which methods will be utilized. It can also result in innovations. For example, when machinery is scarce, people may instead revert to more basic methods of production.