Question

Outline the ‘theories of resource scarcity’. State the reasons for which Bowers (1977)

rejected the ‘scarcity hypothesis’.​

Answer 1

Answer:

The scarcity principle is an economic theory in which a limited supply of a good, coupled with a high demand for that good, results in a mismatch between the desired supply and demand equilibrium. In pricing theory, the scarcity principle suggests that the price for a scarce good should rise until an equilibrium is reached between supply and demand. However, this would result in the restricted exclusion of the good only to those who can afford it. If the scarce resource happens to be grain, for instance, individuals will not be able to attain their basic needs.

Explanation:

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Answer 2

Theories of resource scarcity includes condition which results in mismatch between desired supply and desired equillibrium.      

Explanation:

• In this theory a limited supply of goods results in mismatch between desired supply and desired equillibrium.
• Scarcity theories include pricing theory which says price for a scarce good should rise until an equillibrium is reached between supply and demand.
• The scarcity principle explains the price relationship between dynamic supply and demand.
• This scarcity hypothesis was not accepted by bowers in 1977 because the scarcity concept of economics is too much focused only on the present generation. it do not show any consideration about our future generation that how will they tackel this problem of scarcity .