Question : Society faces economic problems because of
Option 1: Abundance
Option 2: Scarcity
Option 3: Both scarcity and abundance
Option 4: Neither abundance nor scarcity.
Correct Answer: Scarcity
Solution :
The correct answer (b) Scarcity.
In some cases, society may face economic problems due to both scarcity and abundance. While scarcity is the primary economic problem, abundance can also create economic challenges.
Scarcity refers to the limited availability of resources relative to unlimited wants and needs. This fundamental economic problem requires societies to make choices and trade-offs in resource allocation. Scarcity necessitates decision-making regarding what to produce, how to produce, and for whom to produce, considering the limited resources available.
On the other hand, abundance can create economic problems as well. If certain resources or goods become overly abundant, it can lead to issues such as oversupply, price fluctuations, inefficiencies in resource allocation, and challenges in managing excess production. For example, a sudden surge in the production of a particular crop can result in a surplus that leads to price crashes and financial difficulties for farmers.
Therefore, while scarcity is the fundamental economic problem, abundance can also present its own set of challenges.
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