ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -One of the defining features of economics is scarcity, which deals with how people satisfy unlimited wants and needs with limited resources. Scarcity affects the monetary value people place on goods and services and how governments and private firms decide to distribute resources.

Detailed explanation-2: -Scarcity is the condition of not being able to have all of the goods and services one wants because wants exceed what can be made from all available resources at any given time. The wealth that an economy generates is made possible by the circular flow of economic activity.

Detailed explanation-3: -Resource scarcity occurs when demand for a natural resource is greater than the available supply – leading to a decline in the stock of available resources. This can lead to unsustainable growth and a rise in inequality as prices rise making the resource less affordable for those who are least well-off.

Detailed explanation-4: -Resources are scarce because we live in a world in which humans’ wants are infinite but the land, labor, and capital required to satisfy those wants are limited. This conflict between society’s unlimited wants and our limited resources means choices must be made when deciding how to allocate scarce resources.

Detailed explanation-5: -Choice arises as a result of the scarcity of resources. Since it is difficult to produce everything one wants, Choice has to be made by taking up the most pressing wants for satisfaction based on the available resources.