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1. Scarcity being the central economic problem is defined as the inadequacy/ insufficiency/ inability of
(economic) resources or goods and services available to fully satisfy unlimited wants. Human wants
are people's desires for goods and services (backed by the ability to pay) and the
circumstances that enhance their material well-being. Human wants are, therefore, the varied and
insatiable desires of human beings that provide the driving force of economic activity.
Scarcity is a relative concept relating the availability of resources or goods and services to their
abilities to satisfy the unlimited wants, that is, relating people?s wants to the means
available to satisfy them. Scarcity is therefore not the same as "few" resources.
2. Choice is (may be) defined as the power of discretion, that it is, the ability and freedom to select from alternatives or simply as the act or decision of selecting from competing alternatives. Choice arises due to scarcity of resources with such resources having competing alternative uses and therefore
cannot satisfy all human wants pertaining to them at the same time. Choice is made between
alternatives depending on scale of preference which differ between an individual consumer,
producer (firm/investor) or government; determined by the view to maximize satisfaction, return
and equity in provision (especially) of public and merit goods respectively. A rational consumer
chooses those goods (and services) from which maximum satisfaction is derived. For an investor,
choice is made of those ventures, which yield the highest possible return at least cost.
Wilfykil answered the question on February 4, 2019 at 08:59