You are here
What is scarcity and how does it affect our choices?
Answer:
Answer by Student
-lock-
-
Scarcity is the condition that arises when human
wants
exceed the available
resources
and choice is the act of selecting one option among many alternatives
-
For example,
suppose I have Rs. 100 and I want to buy a book and a toy. The book costs Rs. 80 and the toy costs Rs. 50. I cannot buy both because I do not have enough money. I have to choose between the book and the toy. To make this choice, I have to think about what I will gain and lose from each option. The gain of buying the book is learning new things and enjoying reading. The loss of buying the book is giving up the toy. The gain of buying the toy is having fun and playing with it. The loss of buying the toy is giving up the book. I have to think about which option will make me happier and smarter. This is how
scarcity affects my choice.
.
-
Factors such as
income
,
price
, and
information
influence our choices by affecting our
willingness and ability
to buy goods and services. Income is the money that we get .Price is the money we pay to buy a good or service. Information is the knowledge that we have.
- We have to think about the gains and losses of each option. This means that we have to compare the costs and benefits of different options and see how they affect our well-being
-endlock-
