1. What is the allocation of resources?
Ans: There are unlimited wants and limited resources to fulfill them. However, we should fulfill our basic needs by using its alternative uses. Even though using its alternatives there arises the problem of allocation of resources.
So, generally, allocation of resources is the best selection and scientific use of productive resources. It helps to meet our needs for maximum satisfaction.
One should solve the following problems to make allocation of resources:-
1. What to produce?
2. How to produce?
3. For whom to produce?
4. Balanced sectoral development
1. What to produce?
It is impossible to produce all types of goods like consumer goods, capital goods, luxury goods, etc. So, a producer should choose from them. If a producer wants to produce luxury goods, then he/she should produce fewer consumer goods.
2. How to produce?
It is related to the main two methods i.e. labor-intensive which uses more labor and capital intensive which uses more capital. A producer should choose one from them according to the need, situation, and financial status of the economy.
3. For whom to produce?
We cannot fulfill all the wants of human beings. So we should choose one sector of society like teenage people.
4. Balanced sectoral development:
A nation should give equal priority for all sectors i.e. primary, secondary, and tertiary sectors.
2. Write a short note on scarcity and choice.
Ans: Scarcity and choice are the basic problems in economics. Modern Economist Lionel Robbins’ scarcity definition had introduced this concept in economics.
The term scarcity in economics means a lack of enough resources to fulfill all needs and wants of individuals, society, and nations as well. Economic resources are limited. So, we cannot get all our wants and needs fulfilled. In that condition, scarcity problems create automatically. In other words, scarce resources also cause national economic problems like poverty, inequality, lack of infrastructure, and so on.
The act of fulfilling any wants or needs by the economic agents out of many needs is called choice in economics. All economic agents face the problem of choice due to limited resources and unlimited wants. It is involved in both production and consumption. Choices have to be made by all types of people like consumers, producers, firms, organizations, etc.
Reference:-
Principles of Economics 11
BUDDHA PUBLICATION
We hope it helped you to know a little bit about the basic concepts and issues of Economics.
