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Scarcity is mother of all economic problems

Answer» Yes, the statement "Scarcity is the mother of all economic problems." Scarcity is caused by :Limited Resources, Unlimited Wants and alternate uses of resources.Scarcity causes the problem of choice. Choice causes economic problems of decision making. And decision making relates to usage of limited Resources in a manner that a consumer maximises his satisfaction, producer maximises his profit, and society maximises it\'s social welfare.Problem of Choice also seen in the methods of production, things to be produced, for whom things are produced. All the economies (mixed, centrally planned, free) face problems due to Scarcity.Scarcity then relates to the study of demand, price, supply theory, etc.<br>It is true that the scarcity is the root of all economic problems. If there had been no scarcity there would have been no economic problem. This would have not necessitated the study of economics.In our daily life, we face various forms of scarcity. The queues at the railway booking counters, over crowded buses, heavy traffic on roads, the rush to get a ticket to watch a movie of a popular film actor or actress, are all the manifestations of scarcity. We face scarcity because the things that satisfy our wants are limited in availability.Further, the resources which the producers have are limited and also have alternative uses. For instance, take the case of food that we eat everyday. It satisfies our want of nourishment.\xa0Farmers employed in agriculture grow crops that produce our food. At any point of time, the resources in agriculture like land, labour, water, chemical fertilizers, etc, all these resources have alternative uses.The same resources can be used in the production of non-food crops. Thus, alternative uses of resources give rise to the problem of choice between different commodities that can be produced by those resources.


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