What are the characteristics of scarcity definition of economics?
Answers
Explanation:
The third or modern definition of economics was given by Lionel Robbins in the decade of 1930s. Robbins was the citizen of British and professor at London School of Economics. He is one of the modern economists who shifted the focus of economics from welfare aspect to scarcity and choice. In 1932 A.D. he wrote a book entitled "An Essay on the Nature and Significance of Economic Science" and defined economics in terms of scarcity and choices.
According to the Lionel Robbins, "Economics is the science which studies human behavior as a relationship between unlimited ends and scarce means which have alternative uses"ÂÂÂ. This definition was supported by various famous economists like Stigler, Peter, etc.
Scarcity refers to the basic economic problem, the gap between limited – that is, scarce – resources and theoretically limitless wants. This situation requires people to make decisions about how to allocate resources efficiently, in order to satisfy basic needs and as many additional wants as possible. Any resource that has a non-zero cost to consume is scarce to some degree, but what matters in practice is relative scarcity. Scarcity is also referred to as "paucity."
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Answer:
The features of Robbin's definition are: Human wants are unlimited: The scarcity definition of Economics states that human wants are unlimited. ... Economics is also called a science of choice. Hence, scarce resources are to be used for the maximum satisfaction of the essential human wants.