Question

Why does scarcity exist in capitalist market economies and socialist or centrally planned economies?

Answer 1

Scarcity exists in any kind of economic system because all inputs required for economic productions are short in supply. Production requires various inputs, such as human capital, physical capital, natural resources and technology. All resources, be it physical capital (plants or machines) and natural resources (minerals, forests, etc.) have a limited supply. Scarcity arises from the fact that there is a limited supply of resources. All economic systems face the same challenge of limited resources.