...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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...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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...decide to use scarce resources to 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...
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...Scarcity The basic economic problem that arises when people have unlimited wants but there is limited supply is known as Scarcity. This happens when human wants increase and supply decreases. Resources are means by which we make products that can be natural resources such as raw materials, human resource or manufactured resources such as oil. Scarcity, to a large extent can also be seen as a condition where no society has enough resources to produce all the goods and services necessary to satisfy all human wants. Due to the increase in wants people have to suffer severely. People are dying and suffering to receive food, water and space for them to live. Scarcity of water, land and food is the biggest issue in the world today. Many countries are suffering these issue for example Africa and India. Africa is currently suffering from scarcity of food. African famines have become more frequent, more widespread and more severe which cause the food shortage. Agricultural problems include soil infertility, land degradation and erosion, which can destroy whole crops and livestock diseases. People in Africa are facing harsh condition. There is a major percentage of people who are ill or are starving the food scarcity. One way that could help Africa alleviate food scarcity is to depend on imports from countries where food production is higher than demand or to buy food in large amounts for cheap prices. Many people suffer all around the world due to scarcity. Scarcity can lead to a...
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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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...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 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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...uses Economics is essentially a science of choice. And the problem of choice arises due to the problem of scarcity. In general, economics is basically a study of the ways in which people apply their knowledge, skills, and the efforts to the gifts of nature in order to satisfy their material wants. Economics is all about satisfaction of materials wants. The truth is that it is people's wants which provide the motive for economic activity. People go to work in order to obtain an income which will buy them the things they want. IT the resources available to people are insufficient to satisfy all their wants, such resources are said to be scarce. In fact is that we almost always find ourselves in a situation of scarcity. We cannot have all the things we want. The resources available to satisfy our wants are, at any time, limited in supply. Our wants however, appear to be unlimited. This is the economic problem faced by us - by each member of society. And, this problem of scarcity forces us to make choice. We can have more of food by having less of clothing. Economics is a lot more lively than many people have thought of. It's basically about decision making which we do everyday. And we live by participating in daily economic activities, influencing other people by making choices in our own interest and at the same time are subject to all other people's choices. Our resources (incomes) are not sufficient to buy all the things we would like to have. An individual with a limited income...
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...(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 to hire resources. B) is money the firm raises...
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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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...science which studies human behavior as a relationship between ends and 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...
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...Difficulty: Easy NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Comprehension 2. Which of the following statements is true? a. | In a world of efficiently used scarce resources, more of one good necessarily means less of some other good. | b. | The law of increasing opportunity costs assumes that all people have the same ability to produce goods. | c. | Efficiency implies that it is impossible to get more of one good without getting less of another. | d. | Even if a country has unemployed resources, it can still be operating on its production possibilities frontier (PPF). | e. | a and c | ANS: E PTS: 1 DIF: Difficulty: Challenging NAT: BUSPROG: Analytic LOC: DISC: Efficiency and equity KEY: Bloom's: Comprehension 3. Through war, many of the factories in country 1 are destroyed and many of its people are killed. As a result, the country's a. | production possibilities frontier (PPF) after the war has probably shifted to the right compared to its PPF prior to the war. | b. | PPF after the war has probably shifted to the left compared to its PPF prior to the war. | c. | PPF after the war is probably the same PPF as before the war. | d. | ability to produce goods and services has increased. | e. | b and d | ANS: B PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's:...
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...WATER WARS Water is our past. Water is our future. Without it, we cannot survive, and there are no alternatives. Many people have likened the issue of water scarcity to our current economic struggle over petroleum. Without petroleum, we cannot drive our cars, and we may have to walk to school or work. This is not the case for water, as we are not interested in the issue of sustaining life itself. Unfortunately, water scarcity is in the household of our near future. This means that, similarly, petroleum leads to war now, water will lead to war in the near future. There are three main reasons why water scarcity will become one of our most serious problems in the near future. Policies and practices of water management under water scarcity must focus on specific objectives according to the causes of water scarcity. The first reason of poor water management is uncontrolled demand. Today’s world ultimate problem is increasing human population so that the more growing population the more demand for water day by day. However, necessary measures are not taken. Therefore, supply and demand should be make equal by government. The second reason is inequality in water allocation. For example, the world’s water allocation is formed developed countries’ water sources more than to meet their needs but poor and dry countries sources are not to meet the needs. This situation is not fair and should be changed by laws. The third reason of poor water management is lack of effluents treatment and...
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...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, Section: What is Economics? EQ: How does scarcity force people to make economic choices? – Scarcity forces all of us to make choices by making us decide which options are most important to us. – The principle of scarcity states that there are limited goods and...
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...Finite Resources Outline I. Introduction A. Opener: What is water scarcity? B. Thesis statement: One of the crises that our environment is facing is fresh water scarcity which is a very serious issue and it affects our global environmental. II. Water shortage effects on environment and human beings. A. Causes disease B. Agricultural fields C. Poverty group D. Aquatic Ecosystems III. Water scarcity is causes by different factors. A. Global warming B. Changes of climate C. Decreasing ground water level D. Population growth and the increased consumption of water IV. Solution for water scarcity is a necessity. A. Water Sharing Treaty B. Environmentalists Oppose Desalination Solution C. Government’s rules, regulations and plan V. Conclusion: People should use water wisely to prepare a better future for our next generation. Water, Our Finite Resources One of the crises that our environment is facing is fresh water scarcity which is a very serious issue and it affects our global environment. In the boundless black desert of space, the Earth which is always a blue-green oasis has a finite stock of fresh water (Lean, 2009). Water is the principal element for all socio-economic growth and for sustaining healthy ecosystems (“Water scarcity: The”, n.d.). Water scarcity is the product of an inequity between the supply of and demand for water supplies in a geographical area. Plainly put, water scarcity is based...
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