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Home » Economics Homework Help » Microeconomics Help » Economics Scarcity
Economics Scarcity
Economics is mainly concerned with the achievement and use of material requirements to satisfy human wants. Human wants are unlimited and productive resources such as land and other natural resources skilled labour raw material capital equipment with which to produce goods and services to satisfy those wants are a scarce or limited. Thus goods and services which satisfy human wants are scarce because productive resources with which to produces goods and services are scarce. The problem of scarcity of resources is felt not only by individuals but also by the society as a whole with wants beige unlimited resources scarce we individually as well as collectively cannot satisfy all our wants. This gives rise to the problem of how to use scarce resources to attain maximum possible satisfaction of the people. Theses generally called the economicproble as it lies at thereto of all economic problems faced by the society. Every economic system is it capitalist socialist or mixed has to contend with this central problem of scarcity of resources relative to wants for them.

Thus the economics problem derives from the scarcity of resources relative to human wants this gives rise to the struggle of man for existence and efforts by him to increase his well –being that the scarcity of resources in relation to human wants is the fundamental economic problem can be easily understood in the context of poor and developing countries like India where quite a large number of population lives at a bare subsistence level. The struggle for existence due to the scarcity of resources is too obvious in them to need any elaborate explanation. However to say that the developed countries such as U.S. a where affluence and prosperity have been brought about also confront the scarcity problem raises some doubts. But the fact is that despite of their affluence and riches, developed societies too face the problem of scarcity. Of coerce their possession of goods and services has enormously increased but so has their wants. Indeed their wants for goods and services has been multiplying during the course of economic growth so that their present wants still remain ahead of their resources and capacity to produces.

Unlimited wants

As has been said above the economic problem arises not merely due to the limited resource and capacity to produce alone but also due to unlimited human watts. Most of us want better food more and better clothing more education and health care good houses new to sets computers and so many other goods. So long as human wants for goods and services remain ahead of the resource both natural and acquired the economic problem of scarcity would be there.

If Americans today, for example were to content to live at the level of the Indian middle class people all their wants would be fully satisfied with their available resources and capacity to produce. In that situation they would face little or no scarcity and economic problem for them would disappear. Of scarcity even today as their present wants remain ahead of their increased resource and capability to produce.

Scarcity or resources and the problem of choice

Whereas wants of the people are unlimited means to satisfy those wants are limited or scarce. It is due to the scarcity of resource that even a richest society like that of the USA can produce only a limited quantity of the goods and services that people would want to consume if these things were free. Now the goods and services are scarce because the resources to produce them are séance. The scarcity of resources to satisfy human wants gives rise to the basic economic problem of choice. If we cannot have all the goods and services we would like to have we must choose what goods and services are produce to satisfy the wants of the people and what wants be left unsatisfied. Scarcity of resources requires that efficient and optimum use of resources be made so that we should het most out of them and maximum possible satisfaction of the people is achieved further since all wants cannot be satisfied due to scarcity of resurges we face the problem of choice among multiple wants which are to be satisfied. If it is decided to use more resources in one line of production then some resources must be withdrawn from another commodity. Thus the problem of choice form the viewpoint of ht society as a whole refers to which goods and in what quantities are to be produced and how productive resource allocated for their production accordingly so as to achieve the greatest possible satisfaction of the people. An eminent English economist lord Robbins defines economics in terms of this basic economic problem. According to him economic is a science which studies human behaviousr as a relationship between ends and scarce resource which have alternative uses. Ends refer to wants which are considered to be unlimited. The use and allocation of scarce resources to produce goods and services has to be such as would maximise satisfaction. This applies both to the behaviousr of the individual as well as to that of the society as a whole.

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