Question

Explain why scarcity leads to a tradeoff with other countries. List FIVE product items that were affected during the COVID-19.

Answer 1

Scarcity is the state of being short or limited in supply, all the resources in the world are in limited supply and hence there is a need of the proper allocation of these scarce resources, that is why we study economics. Though the quantity of different resources is different in different countries or regions but overall their supply is limited and hence there is a tradeoff between different resources or goods and services between one country and another. It is obvious that if you want something than you have to pay for it i.e. you must give something in return and hence there is tradeoff with other countries. It is not that you can only gain and other partner will not. Hence countries export those items for whose production they have enough resources and import those for whose production their resources are limited i.e. scarce.

During the Covid-19 pendamic and due to the lockdown implemented to control it, the production of most of the goods and services were halted and hence almost all the product items were effected during this time. We can list five of them as -

• Food and drinks
• Medicines and other health products
• Fashion and apparel
• Passenger carriers, both land and air transport
• Sports and sports supplies.