Economic scarcity necessitates resource allocation from "summary" of The Making of Economic Society by Robert L. Heilbroner,William Milberg
Economic scarcity is an undeniable reality in the world we live in. It is the fundamental problem facing every society, irrespective of its economic system. The fact that resources are limited while human wants are unlimited gives rise to the need for resource allocation. In the absence of scarcity, there would be no need to make choices about how to utilize resources. However, scarcity forces individuals, firms, and governments to make decisions about how to allocate resources efficiently. Resource allocation is the process of distributing scarce resources among competing ends. This involves making choices about what goods and services to produce, how to produce them, and for whom they should be produced. In other words, resource allocation involves deciding how to best use limited resources to satisfy the unlimited wants of society. In a market economy, resource allocation is primarily determined by the forces of supply and demand. When resources are scarce...
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