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Explain what is meant in economics by the term scarcity of resources - Leaving Cert Economics - Question 8 - 2019
Question 8
Explain what is meant in economics by the term scarcity of resources. Outline two examples of ways Irish citizens waste resources. (i) (ii)
Worked Solution & Example Answer:Explain what is meant in economics by the term scarcity of resources - Leaving Cert Economics - Question 8 - 2019
Step 1
Explain what is meant in economics by the term scarcity of resources.
Answer
In economics, scarcity of resources refers to the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. Scarcity means that the available resources are insufficient to satisfy all human wants and needs. This results from two key factors:
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Limited Factors of Production: Resources such as land, labor, capital, and entrepreneurship are finite. Economic agents must make choices on how to allocate these limited resources effectively.
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Unlimited Wants: People have insatiable desires for goods and services, leading to a situation where the quantity of goods and services desired exceeds what the economy can produce.
Thus, scarcity necessitates making choices about how best to allocate resources, leading to trade-offs in production and consumption.
Step 2