ECONOMICS
SCARCITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Scarcity forces you to make a decision
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Scarcity gives items value
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Scarcity requires you to use the factors of production
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Scarcity only occurs in the Market Economic System
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Detailed explanation-1: -Scarcity is important for understanding how goods and services are valued. Things that are scarce, like gold, diamonds, or certain kinds of knowledge, are more valuable for being scarce because sellers of these goods and services can set higher prices.
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: -Scarcity and opportunity cost are interlinking concepts. Scarcity is the root cause of all economic problems therefore it is central to all economic decisions. Its importance in managerial decision making lies in taking decisions regarding allocation of scarce resources.
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 and choice are the basic problem of economics, because resources are limited (scarcity) and consumers have to make decisions on how to use these resources and spend their resources (choices). Despite what we often believe, resources do have an end.