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2. Scarcity brings in the problem of choice’- Explain. Our resources are limited; however, desires are unlimited. Economics is concerned about how to meet our unlimited desires with limited resources. We would always like more and better housing, more and better education more and better of practically everything. If our resources were also unlimited, we could say yes to each of our wants and there would be no economics. Because our resources are limited, we cannot say yes to everything. To say yes to one thing requires that we say no to another. Whether we like it or not, we must make choices. Our unlimited wants are continually colliding with the limits of our resources, forcing us to pick some activities and reject others. Scarcity is the condition of having to choose among alternatives. A scarce good is one for which the choice of one alternative use of the good requires that another be given up. A free good is one for which the cho...
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