Question

What determines whether or not a resource is scare? Why is the concept pf scarity important to the definition of economics?

Answer 1

DETERMINATION OF SCARCITY;

• A resource is said is to be scarce when it is not easily available within a particular area/region.
• In other words, when the demand/need of the resource is more than its supply/availability, that resource becomes scarce for that particular region.

IMPORTANCE;

• Economics deals with understanding the human behaviour and the pattern of production, consumption and transfer of wealth.
• Various resources are scarce from region to region and the replenishment rate is very low.
• Thus, a balance has to be maintained between the unlimited needs and wants of the people and the scarce resources.
• If a parity is not maintained between the two, the concept of sustainable development will suffer, as the future generations will have to face a brunt of extreme scarcity.
• Therefore, scarce resources have to be used with utmost intelligence, so that the balancing cycle of production & consumption is not disturbed and there is optimum utilization of resources.
• Scarcity is to be kept in mind while taking all decisions because, if there are no resources, every other process/thing won’t be able to take place.