Economics is all about Scarcity,does Economics deals with shortage?

Question

The subjct matter of economics.

Answer 1

Absolutely!

Let me define the two terms though, because they are not the same.
Scarcity is a basic concept of economics. Basically, resources are limited (time, money, land, etc.) or there is a certain amount of it, and then that's it.
However, our wants are unlimited. When we get something, we just want something else as well. Because both of these statements are true, we have to make choices about what we will make, how will it be made, and who is going to get it when we make it.
This concept that choices are required is called scarcity. In other words, the scarcity of resources forces choices.

Shortages, are more specific. This is when the quantity that people want of something is not met by the supply at a given price. I know that sounds complicated and abstract, stay with me, it will make sense.
Let's say that consumer demand for socks at a price of $1 is 200 socks. But, sock makers are only willing to make 100 socks if the price is $1. Thus there is a shortage.

The thing to remember is that a shortage does not happen unless the government starts messing around with the market and artificially lowers the price a shortage WILL NOT HAPPEN.
The market will correct by raising the price ($1.50), consumer demand will be lower (150 socks) and at a higher price, the producers are willing to make more (150 socks).

Thus, everyone is happy, the consumer gets all the socks they want at the market price, the producer sells all of their socks at the market price, and we don't have shortage (not enough) or a surplus (too much).

Hope this helps,
Good luck!

Answer 2

In economics scarce good is one which the supply is limited, but it usually assumed that the supply can be increased, or a substitute found, if the price is sufficiently high. People will use the word shortage when the the supply suddenly decreases, so something they are used to buying is no longer available at prices(market equlibrium prices) they can afford, if at all. When the shortage occurs for goods that are necessary for life, markets will not work, because people will lie, cheat, steal, and even murder to survive. If there is a functioning government, a rationing system is usually set up, for example in WWII England.