Even though we might not have any idea of what actually economics is, but we do know that the resources in our world are limited and so, we are forced to use these resources smartly. Now lets head towards our topic of discussion; Economics, basically, is the study of how a society uses these limited resources to make commodities that are useful for the people and that are distributed among them. So, regarding the above claim, there are two valid propositions i-e 1- resources are limited or scarce; 2- We must use these resources efficiently. Now there’s a different between being efficient and being effective. To be effective is to have the same amount of output as that of the input, but when we regard being efficient, it is to have a greater amount of output as compared to the input given.
Let us imagine, a society with unlimited resources, a place where everything is available, sounds tempting, must be Paradise. If that was the case with the world, then managers wouldn’t have worries about hiring man-power to bid them to work. Now, when we say that the resources are scare we are actually comparing these resources with our desires. We always desire more, but these resources are so limited that we are forced to only choose a few. So we can conclude that we Humans have unlimited wants and desires, but the resources are limited, so in order to get the most out of these limited resources we are forced to use them efficiently and make out most for ourselves.
One question always comes into people mind that unlimited amount of natural resources are available such as petrol, gas, water, coal and etc but still economics definition claims scarcity of resources, if we consider world is full of natural resources still the economics definition remains true because digging out natural resources also need man power or human resource which are limited not in number but in skills required to perform the tasks.
Economics has two main branches: