Economic problem arises because of scarcity of resources and unlimited human wants.
(i) Wants are unlimited:
(a) This is a basic fact of human life. Human wants are unlimited.
(b) They are not only unlimited but also grow and multiply very fast.
(ii) Resources are limited:
(a) The resources to produce goods and services to satisfy human wants are available in limited quantities. Land, labour, capital and entrepreneurship are the basic scare resources.
(b) These resources are available in limited quantities in every economy, big or small, developed or underdeveloped, rich or poor. Some economies may have more of one or two resources but not all the resources. Moreover the resources have alternate uses.
(c) For example, Indian economy has relatively more labour but less capital and land. The U.S. economy has relatively more land but less labour. No economy in the world has all the resources in abundance. (iii) Resources have alternative uses:
(iii) Generally a resource has many alternative uses.
(b) A worker can be employed in a factory, in a school, in a government office, self employed and so on.
(c) Like this, nearly all resources have alternative uses. But the problem is that which resource should be put to which use.
So, the economy has to decide as to how to utilise theser resources and which will be the best alternative for utilising the resources so that wants are satisfied to the maximum and the economy moves towards solving their central problems.
Test
Sia ? 6 years, 4 months ago
Economic problem arises because of scarcity of resources and unlimited human wants.
(i) Wants are unlimited:
(a) This is a basic fact of human life. Human wants are unlimited.
(b) They are not only unlimited but also grow and multiply very fast.
(ii) Resources are limited:
(a) The resources to produce goods and services to satisfy human wants are available in limited quantities. Land, labour, capital and entrepreneurship are the basic scare resources.
(b) These resources are available in limited quantities in every economy, big or small, developed or underdeveloped, rich or poor. Some economies may have more of one or two resources but not all the resources. Moreover the resources have alternate uses.
(c) For example, Indian economy has relatively more labour but less capital and land. The U.S. economy has relatively more land but less labour. No economy in the world has all the resources in abundance. (iii) Resources have alternative uses:
(iii) Generally a resource has many alternative uses.
(b) A worker can be employed in a factory, in a school, in a government office, self employed and so on.
(c) Like this, nearly all resources have alternative uses. But the problem is that which resource should be put to which use.
So, the economy has to decide as to how to utilise theser resources and which will be the best alternative for utilising the resources so that wants are satisfied to the maximum and the economy moves towards solving their central problems.
0Thank You