Scarcity is the mother of all economic problem.explain.10marks..plz plz answer me as much as possible..

Scarcity is the mother of all economic problems.

central problems of an economy is:
what to produce?
how to produce?
For whom to produce?

What to produce?

Economy decides what to produce on the basis of the availibility of resources and the needs of the economy.The resources in the economy will be scarce,whereas the needs will be unlimited.Thus the economy has to decide which are the goods of atmost necessity and allocate them accordingly.

How to produce?

As stated earlier,Economy decided whether to use capital intensive technique if it has more if advanced technology and efficient resources or labour intensive techiniques if it has more if human resources.In England, population is less and thus has less human resources. So they have to stick on to capital intensive techiques.Whereas in India,population is extremely high.It is better if it adopt labour intensive technique.Adoption of capital intensive technique for the advancement of technology will result in jobless growth.

For whom to produce?

Economy must decide who should enjoy the benefits of the economy. If the economy enhances the production of luxury goods,it can benefit only the upper sections of the economy.But if the economy enhances the production of the basic needs like food,clothing and shelter it can benefit all sections of the society.

From the above information it is understood that scarcity of resources leads the economy to make a choice.This problem of choice is the major economic problem.
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Scarcity: it refers to limitation of supply in relation to demand for a commodity.
As we all know that scarcity is the main reason for study economics, as scarcity is not only the problem. In addition to being scarce, resources also have alternative uses.
For example:- milk is used for drinking, for tea and coffee for making butter and cheese and for curd and many more.
Due to scarcity there are various reasons for economic problems are follows:
(i) Scarcity of Resources:- Resources are limited in relation to their demand and economy can not produce all what people want.
(ii) Human Wants are Unlimited:- Human wants are never ending. As soon as one want is satisfied, another new want emerges. Human wants are also differ in priorities.
(iii) Alternate Uses:- Resources are not only scarce but they can also have various uses.
For example:- Petrol is used not only in vehicles but also running machines.
As a result if there is no scarcity of resources no economic problem rises. So we can say that scarcity is the mother of all problems related to economics.
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Scarcity is the mother of all economic problems

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The statement is true,no matter ,how well a particular economy is endowed with resource, these resources will be relatively scarce to fulfil it's unlimited wants.Moreover these scarce resources have alternative uses and can be allocated to the production of different goods and services
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