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Consider the following and decide which, if any, economy is without scarcity
  • a)
    the pre-independence Indian economy, where most people were farmers
  • b)
    a mythical economy where everybody is a billionaire
  • c)
    any economy where income is distributed equally among its people
  • d)
    None of these
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Consider the following and decide which, if any, economy is without sc...
Introduction:
Scarcity refers to the limited availability of resources in relation to unlimited wants and needs. It is a fundamental concept in economics as it necessitates the allocation of resources to satisfy the most pressing needs. In this context, we will analyze the given options to determine if any economy is without scarcity.

Analysis:
a) The pre-independence Indian economy, where most people were farmers:
In the pre-independence Indian economy, the majority of the population were engaged in agriculture as farmers. While they had access to land and resources for cultivation, scarcity still existed. Farmers faced limitations in terms of land, water, fertilizers, and other inputs necessary for agricultural production. Additionally, they also had limited access to markets and faced challenges in securing fair prices for their produce. Therefore, scarcity was prevalent in the pre-independence Indian economy.

b) A mythical economy where everybody is a billionaire:
In a mythical economy where everybody is a billionaire, scarcity may appear to be eliminated at first glance. However, scarcity is not solely determined by the availability of wealth. It is also influenced by the availability of resources and the allocation of goods and services. Even if everyone is a billionaire, there will still be a limited supply of resources such as land, labor, capital, and natural resources. Moreover, the allocation of goods and services will require choices and trade-offs, as individuals' wants and needs will still surpass the available resources. Therefore, even in such a mythical economy, scarcity would still exist.

c) Any economy where income is distributed equally among its people:
In an economy where income is distributed equally among its people, scarcity would still prevail. While equal distribution of income may contribute to reducing inequality, it does not eliminate the limited availability of resources. Scarce resources such as land, labor, and capital would still need to be allocated efficiently to meet the needs and wants of the population. Moreover, individuals' preferences and demands vary, which would require choices and trade-offs to be made in resource allocation. Consequently, scarcity would persist in any economy, irrespective of income distribution.

Conclusion:
After analyzing the given options, it is evident that none of the economies mentioned are without scarcity. Scarcity arises due to the limited availability of resources relative to unlimited wants and needs. It is a core economic concept that necessitates the allocation of resources to satisfy the most pressing needs. While different economic systems and income distributions can influence the degree of scarcity, it cannot be entirely eliminated.
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Consider the following and decide which, if any, economy is without scarcitya)the pre-independence Indian economy, where most people were farmersb)a mythical economy where everybody is a billionairec)any economy where income is distributed equally among its peopled)None of theseCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Consider the following and decide which, if any, economy is without scarcitya)the pre-independence Indian economy, where most people were farmersb)a mythical economy where everybody is a billionairec)any economy where income is distributed equally among its peopled)None of theseCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following and decide which, if any, economy is without scarcitya)the pre-independence Indian economy, where most people were farmersb)a mythical economy where everybody is a billionairec)any economy where income is distributed equally among its peopled)None of theseCorrect answer is option 'D'. Can you explain this answer?.
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