3.1.8. Resource Scarcity

3.1.8. Resource Scarcity

We had already seen that human wants are unlimited and reoccurring. But the resources which are needed to satisfy these wants are rather limited. Further, the resources have alternative uses also. Therefore, use of these scarce resources is essentially a question of choice. Once the option is exercised, the next choice is forgone. Resource scarcity is the central theme of economics as it attempts to portray human behavior in using scarce resources having alternative uses to satisfy unlimited and reoccurring human wants.

To produce a good we need four basic requirements: land, labour, capital and management. These are called the factors of production. These are otherwise essential or inevitable inputs. These resources are also scarce and have alternative uses . It means judicious decision making is needed to make the best use of these resources.

Last modified: Wednesday, 21 December 2011, 10:42 AM