PROBLEMS OF SCARCITY LEADS TO ECONOMIZING OF RESOURCES
1. PROBLEMS OF SCARCITY
LEADS TO ECONOMIZING
OF RESOURCES
PRESENTED BY: MD. IMTIAZ KHAN
ROLL NO. 13DM058
ROHAN BHOWMICK
ROLL NO. 13DM074
2. 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.
3. 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.
4. 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.
5. 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)
6. 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.
7. 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:
8. 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:
9. 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
