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: -The Economics of Seinfeld says the following regarding the term: “Unlimited wants essentially mean that people never get enough, that there is always something else that they would like to have.” “When combined with limited resources, unlimited wants result in the fundamental problem of scarcity.”

Detailed explanation-3: -’Scarcity of resources’ implies that there are unlimited wants to be fulfilled by limited resources. The basic concern of an economy is to allocate the scarce resources to the best possible use in the face of unlimited wants. Thus, the problem of scarcity forces an economy to make a choice among various alternatives.

Detailed explanation-4: -d. A scarcity occurs when there are limited quantities to meet unlimited wants, and a shortage occurs when a good or service is unavailable.

Detailed explanation-5: -Demand-induced scarcity reflecting rising demand. Supply-induced scarcity caused by diminished supply. Structural scarcity attributable to mismanagement or inequality.