Question : Consider the following and decide which, if any, economy is without scarcity:
Option 1: The pre-independent Indian economy, where most people were farmers.
Option 2: A mythical economy where everybody is a billionaire.
Option 3: Any economy where income is distributed equally among its people
Option 4: None of the above
Correct Answer: None of the above
Solution :
The correct answer is (d) None of the above.
Scarcity refers to the limited availability of resources relative to unlimited wants and needs.
In all the given scenarios, scarcity still exists, although the nature of scarcity may vary.
a) In the pre-independent Indian economy, even though most people were farmers, there were still limitations on resources such as land, water, and labor, which created scarcity in the allocation of those resources.
b) In a mythical economy where everybody is a billionaire, while individuals may have abundant financial resources, there would still be scarcity of other resources like time, natural resources, and certain goods and services. Scarcity extends beyond just monetary wealth.
c) In an economy where income is distributed equally, there would still be scarcity of resources, as equal distribution of income does not eliminate the fundamental problem of limited resources relative to unlimited wants.
Therefore, scarcity exists in all economies, and none of the given scenarios represents an economy without scarcity.
