GENERAL KNOWLEDGE

Detailed explanation-1: -Scarcity exists because we have limited resources and unlimited wants. No society has ever had enough resources to produce all the goods and services its members wanted. Because of scarcity, all decisions involve costs.

Detailed explanation-2: -There is always scarcity, because human wants are unlimited. This then brings use to a third important idea: Because of scarcity we MUST MAKE CHOICES. Some economists call this the “economizing problem". We can’t have everything that we want so we have to choose.

Detailed explanation-3: -In general, scarcity refers to the idea that resources are limited, but our wants and needs are unlimited. Scarcity is the concept that resources are only available in limited supply, whereas society’s demand for those resources is unlimited.

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.