Indeed, their wants for goods and services has been multiplying during the course of economic growth so that their present wants still remain ahead of their resources and capacity to produce.Īs has been said above, the problem of scarcity of resources arises not merely due to the limited resources and capacity to produce alone but also due to immense human wants. Of course, their possession of goods and services has enormously increased, but so his their wants. However, to say that the developed countries, such as U.S.A., where affluence and prosperity have been brought about also confront the scarcity problem raises some doubts.īut the fact is that, despite of their affluence and riches, developed societies too face the problem of scarcity.
The struggle for existence due to the scarcity of resources is too obvious in them to need any elaborate explanation. That the scarcity of resources in relation to human wants is the fundamental economic problem can be easily understood in the context of poor and developing countries like India where quite a large number of population lives at a bare subsistence level. This gives rise to the struggle of man for existence and efforts by him to promote his well-being. Thus the economic problem derives from the scarcity of resources relative to human wants. Every economic system, be it capitalist, socialist or mixed, has to contend with this central problem of scarcity of resources relative to wants for them. This is generally called ‘the economic problem’ as it lies at the root of all economic problems faced by the society.
#ECONOMIC ISSUES HOW TO#
This gives rise to the problem of how to use scarce resources to attain maximum satisfaction. With wants being unlimited and resources scarce, we individually as well as collectively cannot satisfy all our wants. The problem of scarcity of resources is felt not only by individuals but also by the society as a whole. Thus goods and services which satisfy human wants are scarce because productive resources with which to produce goods and services are scarce. Human wants are unlimited and productive resources such as land and other natural resources, raw materials, capital equipment with which to produce goods and services to satisfy those wants are scarce and limited. Economics is mainly concerned with the achievement and use of material requirements to satisfy human wants.
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