...Scarcity Think of a thing that you like to have. What would your life be like if you suddenly couldn't get any more of it? People deal with this kind of problem every day. It's called scarcity. It comes from the word scarce, which means there isn't a lot of it or it isn't always available. Some fruits and vegetables are scarce in markets sometimes because those fruits or vegetables grow only at certain times of the year. Because the supply of fruits and vegetables is lower, there is a better chance that those fruits and vegetables will be scarce, or not always available. You may find that the market has no strawberries at all. Why? Either no shipments of strawberries came in, or so few strawberries came in that by the time you got there, they were all gone. What does this mean for the demand of strawberries? If enough people want strawberries when none are available, then the demand is quite high. And the demand is high not because the price is low (as is usually the case) but because the supply is low. An older person in your family can probably tell you about a time 30 years ago when there was a gasoline shortage. At that time, in the 1970s, gasoline was scarce. Many people wanted to buy it, but only a certain amount was available. This is a great example of scarcity: Wants are more than what is available. The supply was low. Because the demand was greater than the supply, the gasoline was scarce. So how does scarcity relate to supply and demand? Scarcity is a measure...
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...will discuss the role of scarcity in our economy and how it affects the market, also the economic and political systems created to solve the problem of scarcity. I will also discuss the role of scarcity on the choices made on an economy and how it affects the choice of the different types of economic systems. I will discuss the difference of capitalism and corporatism, the perfect competition against imperfect competition and how those economic systems are related to scarcity. I will also examine the role of scarcity on the rationing of products and food and how it influences people decisions on what they do with their money. To conclude I will examine the best solutions possible for the problem of scarcity and the mistakes made by governments when handling the problem of scarcity and their use of economic theories by know economics. Overall I am going to prove scarcity’s hole in every action we take related, or not, to economics. Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals can be pursued at the same time; trade-offs are made of one good against others. It is a problem because the more one men wants the less the others can have because of the limited resources on the world. Scarcity relates to the amount of...
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...Principles of Macroeconomics, 9e - TB1 (Case/Fair/Oster) Chapter 2 The Economic Problem: Scarcity and Choice 2.1 Scarcity, Choice, and Opportunity Cost 1 Multiple Choice 1) The process by which resources are transformed into useful forms is A) capitalization. B) consumption. C) production. D) allocation. Answer: C Diff: 2 Topic: Scarcity, Choice, and Opportunity Cost Skill: Definition 2) Outputs in the production process are A) pollution. B) money. C) good and services of value to households. D) resources. Answer: C Diff: 2 Topic: Scarcity, Choice, and Opportunity Cost Skill: Definition 3) Which of the following is NOT a resource as the term is used by economists? A) land B) labor C) buildings D) money Answer: D Diff: 1 Topic: Scarcity, Choice, and Opportunity Cost Skill: Fact 4) Which of the following would an economist classify as capital? A) a $50 bill B) a corporate bond C) a post office employee D) a guitar used by a musician Answer: D Diff: 2 Topic: Scarcity, Choice, and Opportunity Cost Skill: Conceptual AACSB: Reflective Thinking 5) Capital, as economists use the term, A) is the money the firm spends...
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...(a) Using the production possibility curve, explain the concepts of scarcity, choice and opportunity cost. [10] (a) The concepts of scarcity, choice and opportunity cost can be explained with reference to the production possibility curve. Scarcity leads to choice and choice leads to opportunity cost. Although factor inputs are finite, human wants are infinite which leads to the problem of scarcity. Scarcity is the situation where finite factor inputs are insufficient to produce goods and services to satisfy infinite human wants. Scarcity necessitates choice. In other words, due to scarcity, society must choose what goods and services to produce. The opportunity cost of a course of action is the benefit forgone by not choosing its next best alternative. When a choice is made, an opportunity cost is incurred. In other words, when society chooses what goods and services to produce, it is choosing what goods and services not to produce. The production possibility curve (PPC) reflects scarcity, choice and opportunity cost. Suppose that there are only two goods produced in the economy. The PPC shows all the different combinations of the two goods that can be produced in the economy when factor inputs are fully and efficiently employed, given the state of the technology. The above diagram is the PPC. Although the points inside and on the PPC are attainable, the points outside the PPC are not. Scarcity is reflected by the unattainable points that lie outside the PPC, such as point...
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...scarce means which have alternative uses." David Simon - Economics is a social science that attempts to use the scarce resources to attain a maximum fulfillment of mans' unlimited wants. Scarcity: All economic questions arise from a single and inescapable fact: you can't always get what you want. (We live in a world of scarcity) Scarcity is define to mean- wants always exceed the resources available to satisfy them. Wants do not simply exceed resources, they are unlimited. Scarcity is a relative concept as opposed to an absolute concept. 1) Good: Anything that gives one utility or happiness or pleasure or satisfaction. 2) Bad: Anything that gives one disutility or unhappiness or displeasure or dissatisfaction. Free good vs. Economic goods Choice: Scarcity implies choice (scarcity → choices): Choice is the act of selecting among restricted alternatives. Optimization vs. economization OPPORTUNITY COST: Choices imply opportunities (choices → opportunity cost) Can one make a choice without incurring a cost? The answer is NO. Choice naturally implies cost and because scarcity implies choice, we conclude that scarcity indirectly implies cost. Thus the concepts scarcity, choice, and cost are linked. THE NATURE AND ROLE OF THEORY What is a Theory? What is abstraction? Steps in building and testing a theory Scientific Thinking: The fundamentals of scientific thinking 1) The Association- Causation Issue: 2) The Fallacy of Composition:...
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...CHAPTER 1—WHAT IS ECONOMICS? MULTIPLE CHOICE 1. The basic problem of economics arises when there are unlimited resources available to fulfill society's limited wants. a.|True| b.|False| ANS: B PTS: 1 DIF: Difficulty: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity and Individual Choice KEY: Bloom's: Knowledge 2. Economics is the study of choice under conditions of a.|demand| b.|supply| c.|scarcity| d.|opportunity| e.|abundance| ANS: C PTS: 1 DIF: Difficulty: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity and Individual Choice KEY: Bloom's: Comprehension 3. The study of economics would be superfluous if __________ did not exist. a.|demand| b.|capital| c.|corporations| d.|profit| e.|scarcity| ANS: E PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity and Individual Choice KEY: Bloom's: Comprehension 4. Which of the following disciplines is not a social science? a.|psychology| b.|mathematics| c.|economics| d.|political science| e.|sociology| ANS: B PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic STA: DISC: The Study of economics, and definitions in economics TOP: Scarcity and Individual Choice KEY: Bloom's: Comprehension 5. What does economics have in common with sociology? a.|Economics and sociology ask fundamentally the same questions...
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...SCARCITY SCARCITY Introduction We live in the world of scarcity. None of us can have all that we want. It is the most fundamental concept in economics. We do not and cannot have enough income or wealth to satisfy our every desire for these develop and expand with every technological advancement. The world is such that no matter how much we produce; we cannot have as much of everything desired without sacrifice. Scarcity occurs for everyone, rich and poor. In economics, this sacrifice is called opportunity cost. (chon, 2011) Humanity is demanding over greater economic productivity at a time when natural resources, the input that feeds this productivity, are dwindling. To reduce pressure on key assets, such as water, minerals, fuel and land, we must use less of them, and we need to increase the efficiency and productivity of resources that we do use, to achieve more output per input. Put simply, we must do more with less. Developing this society will require large-scale and widespread changes to how the economy functions. However, scientific, economic and social research can play an important role in reaching this goal, by determining current levels of consumption, measuring levels of efficiency, and developing new, more efficient technologies and processes. Furthermore, it can analyse different policy options and help us understand their impact on behavior and perceptions of resource use. (Brown,1995) This paper will focus on scarcity and the use of PPC to reduce...
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...CHAPTER 1—WHAT IS ECONOMICS? MULTIPLE CHOICE 1. The basic problem of economics arises when there are unlimited resources available to fulfill society's limited wants. a.|True| b.|False| ANS: B PTS: 1 NAT: Financial theories, analysis, reporting, and markets LOC: Scarcity, tradeoffs, and opportunity cost TOP: Economics | Scarcity and Choice 2. Economics is the study of choice under conditions of a.|demand| b.|supply| c.|scarcity| d.|opportunity| e.|abundance| ANS: C PTS: 1 DIF: 1 NAT: Financial theories, analysis, reporting, and markets LOC: Scarcity, tradeoffs, and opportunity cost TOP: Economics | Scarcity and Choice 3. The study of economics would be superfluous if _____ did not exist. a.|demand| b.|capital| c.|corporations| d.|profit| e.|scarcity| ANS: E PTS: 1 DIF: 2 NAT: Financial theories, analysis, reporting, and markets LOC: Scarcity, tradeoffs, and opportunity cost TOP: Economics | Scarcity and Choice 4. Which of the following disciplines is not a social science? a.|psychology| b.|mathematics| c.|economics| d.|political science| e.|sociology| ANS: B PTS: 1 DIF: 1 NAT: Financial theories, analysis, reporting, and markets LOC: The study of economics, and definitions of economics TOP: Economics | Scarcity and Choice 5. What does economics have in common with sociology? a.|Economics and sociology ask fundamentally the same questions.| b.|Economics and sociology use the same tools to analyze...
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...satisfy wants. This fundamental economic concept of scarcity is at the core of the discipline. There are never enough natural resources, human resources, or capital resources (man-made goods such as tools, equipment, machinery, factories) to produce everything society wants. Therefore, choices must be made on what to produce, how to produce, and for whom to produce. Choices must also be made at a personal level. There never seems to be enough money or time to have or to do everything one wants. Economics is a way of thinking, a science of making choices. Economists examine the decision-making processes of individuals, businesses, markets, governments, and economies as a whole. An understanding of economic principles helps people to consider not only the short-term effects of a decision, but also its long-term effects and possible unintended consequences; to see the connections between personal self-interest and societal goals; to understand how individual and social choices are made in the context of an economy; and to analyze the impact of public policies and events upon such social goals as freedom, efficiency, and equity. Because of increasing interdependence and globalization, everyone in the United States needs to be aware of the issues in the global economy, their role in that system, and be able to respond to changes so that they can effectively maintain or raise their standard of living. • Due to scarcity, individuals, families, communities, and societies...
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...can we help reduce water scarcity in the world? What are the hindrances? What are the consequences of failure? Student Name: Yang GU (John) Student ID: 505052 Teacher: Peter Wald Date: 10/05/2013 Water is essential because water can maintain the process of eco-system, supplies the agriculture and human cannot live without water. However, there is the increasing number of water issues are appearing in the modern world and issues tend to be serious, especially the supply of water. Although water scarcity is an issue which needs to be solved quickly but, water scarcity is not easy to be reduced and when the project failed, it may cause more problems can make problems worse than before. There are over 43 countries are suffering from water scarcity approximately (United Nations). It may cause a number of water-related problems: starvation, water security, and poverty. According to a report which was published from the IWMI (Barker, R et al 2000) has pointed out the water scarcity is growing. In the meantime, research also found out the some poverty areas usually has the problem of water scarcity, especially Africa (Barker, R et al 2000). Therefore, solve the water scarcity problem should be the priority for some drought countries all around the world. For instance, The United Nations is running a plan called The “WATER FOR LIFE DECADE”; the aim of this plan is to help some places where lack of water to face the challenges of water scarcity (FAO 2006). The programme...
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...a) What is meant by water scarcity? Water scarcity can be defined as the lack of sufficient available water resources, lack access to fresh water, potable water for drinking and sanitation to meet the demands of water usage within a region. Water scarcity occurs because the population is increasing around the world coupled with urbanization and industrialization so the demand for water is increasing and this will lead to serious consequences on the environment. Water scarcity divided into two types that are physical water scarcity and economic water scarcity. Physical (absolute) water scarcity occurs when there is not sufficient water to meet demand. This could be the result of dry or arid local conditions. Physical water scarcity occurs because of abundant source of water being overused and over managed. There is another equally challenging source of water scarcity: economic factors. Economic water scarcity is predominant lack of infrastructure investments are political and ethnic problems. Over 1.2 billion are basically living in areas of physical water scarcity. And almost 1.6 billion face economic water shortage. Water scarcity involves water stress, water shortage or deficits, and water crisis. Water stress is the difficulty of obtaining sources of fresh water. Water shortages caused by climate change for example droughts or root impairment, pollution, increased human demand and overuse of water. Water crisis is a situation where the available potable, unpolluted...
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...same thing as scarcity.” Do you agree or disagree with this statement? Why or why not? Business dictionary states the following: “Scarcity and shortage must be viewed with an economic eye on the problem. These terms are related to goods and services that are produced for public consumption. Both terms relate to the amount of goods and services available, but each has a very different meaning.” Scarcity is the basic economic problem that people have because of their unlimited wants and their resources are unlimited as well. There are several economic decisions that have to be made in order to allocate the resources efficiently. An example of scarcity would be oil. Oil is considered scarce because it comes from developing countries and it is very price competitive. This drives the prices for the oil to be at all time highs because of its limited amount. Shortage is the demand for a product or service that exceeds the total available supply. Shortages are caused by miscalculated demand or perhaps under produced demand on purpose. An example of a shortage would be a video game. During the holiday season a company introduces a new video game that they only made a supply of 1,000,000 copies. Within the continental U.S. and other countries they must provide each retail store that sells the product with a limited amount of copies. This makes consumers stand or sleep outside retail stores for hours just to be the one the few to get the video game. Scarcity and shortage are...
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...Jonas Miguel M. Valeza Prof. Rodrigo Dolorosa BSBA HRDM 2-1 Basic Economics with Taxation and Agrarian Reform A Whole New World : Economics and Me Economics is the study of choices and behaviors. Economics focuses on why we make the choices we do and what the implications or effects of those choices are. In this essay, I will talk about the magnificence of Economics and how it has been a part of our daily lives. So what are you waiting for? Come and join the fun as we wend our ways through the marvelous world of Economics! Economics may seem like a theoretical subject, but it actually has many practical applications in daily life. Economics studies the way people and companies interact with each other, and cover such diverse fields as finance, law, education, business, government policy and more. Having a firm grip of these subjects gives the individual a big advantage both in business and personal life. As a Human Resource Development Management Student of Polytechnic University of the Philippines Quezon City Campus, I found Economics as one of the foundations of the Human World. Economics deals with decision....so in everything you do, like how will you spend your money wisely, how will you budget your time, how you react in every issues that involves your everyday life, all of it, is already the application of Economics in our daily lives. Economics defined as a study of mankind in the ordinary business of life; it examines that part of individual...
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...Scarcity (also called paucity) is the problem of Infinite human needs and wants, in a world of finite resources. It means that there are not enough, nor can there ever be enough, good and services to satisfy the wants and needs of all individuals, families, and societies. In other words, society does not have sufficient productive resources to fulfill those wants and needs. Alternatively, scarcity implies that not all of society's goals can be pursued at the same time; trade-offs are made of one good against others. Scarcity can also be broken down to four key ingredients: land, labor, capital and enterprise. In an influential 1932 essay, Lionel Robbins defined economics as "the science which studies human behavior as a relationship between ends and scarce means which have alternative uses." Opportunity cost or economic opportunity loss is the treasured of an adjoining different of a foregone result in making a decision. Opportunity cost also analysis the considerable part of a company's in decision-making processes, but is not treated as an absolute cost in any financial statement. The upcoming best concern that a person can engage in is referred to as the opportunity cost of doing the finest being and ignoring the next prime thing to be done. Economic opportunity cost the basic problems in society. Therefore it focuses on the differences between human resources and natural environment. The basic scarcity could be an understanding in a confirming life, good life, and hope...
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...Chapter 1: What is Economics? Section 1 Key Terms • need: something essential for survival • want: something that people desire but that is not necessary for survival • goods: the physical objects that someone produces • services: the actions or activities that one person performs for another • scarcity: the principle that limited amounts of goods and services are available to meet unlimited wants Chapter 1, Section 1 Copyright © Pearson Education, Inc. Slide 2 Key Terms, cont. • economics: the study of how people seek to satisfy their needs and wants by making choices • shortage: a situation in which consumers want more of a good or service than producers are willing to make available at particular prices • entrepreneur: a person who decides how to combine resources to create goods and services • factors of production: the resources that are used to make goods and services Chapter 1, Section 1 Copyright © Pearson Education, Inc. Slide 3 Key Terms, cont. • land: all natural resources used to produce goods and services • labor: the effort people devote to tasks for which they are paid • capital: any human-made resource that is used to produce other goods and services • physical capital: the human-made objects used to create other goods and services • human capital: the knowledge and skills a worker gains through education and experience Chapter 1, Section 1 Copyright © Pearson Education, Inc. Slide 4 Chapter 1...
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