PROBLEMS OF SCARCITY LEADS TO ECONOMIZING

OF RESOURCES

PRESENTED BY: MD. IMTIAZ KHAN

ROLL NO. 13DM058

ROHAN BHOWMICK

ROLL NO. 13DM074

INTRODUCTION

• Unlimited wants: First fundamental fact– Human wants are unlimited & they want to use the

goods and services to the fullest which will satisfy their needs.

• Scarce resources: Second fundamental fact– Economic resources are limited relative to wants.– Producers face the problem of what to produce,

how to produce & for whom to produce.

SCARCITY

• It is the fundamental economic problem of having unlimited human wants which is required to be fulfilled in a limited resources.

• It states that society has limited productive resources to fulfill all human wants & needs.

• In other words, scarcity implies that all the goals of society cannot be pursued at the same.

SCARCITY: ECONOMIC PROBLEM

• According to Lionel Robbins, “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.”

• The problem of scarcity is that our wants are always beyond what we can produce with our resources.

• Economics is the solution to this problem of what resources to use, How best to use them, and when to use them.

SCARCE RESOURCES

• Our resources are limited by the 4 factors of production :• Land• Labour• Capital• Enterprise.

• Resources: all natural, human, & other resources used in the production of goods & services.

• Property (Land, Raw Materials & Capital)• Human (Labour & Entrepreneurial)

ECONOMIZING OF RESOURCES

• Economizing of resources means using of resources in best possible way and to their fullest capacity.

• The fundamental issue that arises is scarcity of goods and services compared to the demand for them by consumers.

• Solving the economizing problem for a business involves making decisions about best allocation of resources to produce the maximum out of it.

EMPLOYMENT AND EFFICIENCY

• Economics is a science of efficiency in the use of scarce resources. Efficiency requires full employment of available resources and full production.

• Full employment means all available resources should be employed.

• Full production means that employed resources are providing maximum satisfaction of our economic wants.

• Example:

UNEMPLOYMENT & INEFFICIENCY

• The economy would produce less as there would be less input of human resources & the resources would not be utilized to the maximum.

• This would also decrease the performance of the existing employees due to lack of competition.

• A move toward full employment & efficiency would yield a greater output of one or both products.

• Example:

CONCLUSION

• As human wants are unlimited and resources are scarce, economizing of resources is very important.

• Some effective solutions are:- Optimum utilization of resources- Full employment- Full production- Adoption of advance technology

THANK YOU