Chapter 1 Introduction

 

What is an economy?

An economy is a system which provides people, the means to work and earn a living.

 

Scarcity

Scarcity refers to the limitation of supply in relation to demand for a commodity.

 

Economic problem

Economic problem is a problem of choice involving satisfaction of unlimited wants out of limited resources having alternative uses.

 

Reasons for economic problem

The 3 main reasons for existence of economic problems are:

  1. Scarcity of resources
  2. Unlimited human wants
  3. Alternate uses

 

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Author: Ravi Kashyap

Commerce Expert

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