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ECON MICRO

5th Edition
William A. McEachern
ISBN: 9781337000536

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ECON MICRO

5th Edition
William A. McEachern
ISBN: 9781337000536
Textbook Problem

(Definition of Economics) What determines whether or not a resource is scarce? Why is the concept of scarcity important to the definition of economics?

To determine

The importance of the concept of scarcity in economics and to determine if a resource is scarce.

Concept Introduction:

Scarcity of resources: It means lack of resources in comparison to wants.

Explanation

The scarcity of resources is determined when demand is more than availability and the price of resources is more than zero. The human demands are unlimited and means to meet those wants are limited. This situation requires the efficient allocation of scarce resources in such a way that all the resources should be optimally utilized (no resource should go waste).

The concept is important to the definition of economics because it studies the human behavior as a relationship between unlimited wants and scarce resources. It is the science which studies how to make a choice between alternative uses of scarce resources. Scarcity is itself a big economic problem. Without it, economies studies will have no value.

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