Scarcity is a root problem cause of economics.Explain
Answers
Scarcity is the root cause for all economic problems. No matter, how well a particular economy is endowed with resources, these resources will be relatively scarce to fulfil its unlimited wants. Moreover, these scarce resources have alternative uses and can be allocated to the production of different goods and services. Allocation of resources to any particular use involves a cost in terms of sacrifice of the other possible uses. To allocate the scarce resources in the best possible manner, an economy needs to analyse the cost (i.e. the opportunity cost) of allocating the resources to one use while sacrificing the other uses. Thus, it is due to the scarce availability of resources (having alternative uses) to fulfil the different and competing unlimited wants that an economy faces the economic problem or the problem of choice.
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Concept introduction:
A basic economic problem is scarcity, or limited resources. While resources are limited, we are a society with unlimited wants, which results in scarcity.
Explanation:
Given that, scarcity is a root cause of economic problem.
We have to find, how scarcity is related to root cause of problems.
According to the question, The root of all economic problems is scarcity. There are many forms of scarcity that we encounter in day to day life when the available service are not enough to meet our needs such as heavy crowd on buses, long lines at railway booking counters, and the shortage of essential commodities all are due to scarcity of services.
Final Answer:
People face scarcity when available resource are not enough to meet their needs so it is major economic problem.
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