a) What is meant by scarcity of resources? b

a. What is meant by scarcity of resources?

Answer: Scarcity of resources means limited availability of resources. It is a widely accepted fact that all the resources be it the ones that are freely available or chargeable are available in limited quantities. Hence, the allocation of scarce resources to the best possible use to maximize its utility poses a universal challenge.

b. If there is no scarcity, then economics ceases to exist? Do you agree or disagree? If yes, explain. If no, explain.

Answer : Economics is based on three basic principles

1. Resources are scarce.

2. Resources have multiple use.

3. Human needs are unlimited.

The study of economics revolves around allocation of scarce resources to the best possible use so as to maixmize the utility.

It can be safely stated that without the scarcity of resources, economics cease to exist.

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