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.

Detailed explanation-2: -The fundamental problem in economics is the issue with the scarcity of resources but unlimited wants. Economics has also pointed out that a man’s needs cannot be fulfilled. The more our needs are fulfilled, the more wants we develop with time. By definition, scarcity implies a limited quantity of resources.

Detailed explanation-3: -The existence of scarcity creates the basic economic problem faced by every society, rich or poor: how to make the best use of limited productive resources to satisfy human needs and wants.

Detailed explanation-4: -’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-5: -What to produce? How to produce? For whom to produce? What provisions (if any) are to be made for economic growth?