The problem of scarcity:
We live in a word of scarcity people want and need variety of goods and
services. This applies equally to the poor and the rich people. It implies that
human wants are unlimited but the means to fulfill them are limited. At any one
time, only a limited amount of goods and services can be produced. This is
because the existing supplies of resources are extremely inadequate. These
resources are land, labor, capital and organization.
These factors of production or inputs are used in
producing goods and services that are called economic goods which have a piece.
These fact explain scarcity as the principal problem of every society and
suggest the law of scarcity, the two states that “Human wants are virtually
unlimited and the resources available to satisfy these wants are limited.”
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