Basic Economic Problems Essay

Let's take two scarce goods - shark meat and chicken.Both have a non-zero cost/price, but we would all agree shark meat is much more expensive to buy than chicken. The resources to produce shark meat are largely limited by the labor and capital it takes to catch a shark, while the labor and capital required to produce chickens is less limiting.

However, that combination is unattainable given the limited resource of labor. In summation, scarcity exists because we live in a society with limited resources and unlimited wants and needs.

It forces us as a society and individual people to make decisions every day.

This would require the resources to be unlimited as well for it to meet unlimited demand. Something that you have infinite access to and you would never expect to run out? Scarcity of goods can be looked at in terms of an individual person consuming goods and services as well as society producing and distributing the goods and services to be consumed.

In both cases, the resources needed are limited while the wants are unlimited.

Therefore planning authority keeps this objective in mind while choosing a technique of production.

As a member, you'll also get unlimited access to over 79,000 lessons in math, English, science, history, and more.Without scarcity, the study of economics would not exist because we would produce, distribute and consume everything to meet all of our needs.There would be no choice about consumption because it would be unlimited.(i) The decision of what to produce and in what quantities is carried out on the basis of national priorities.(ii) In a socialist economy the main objective is to ensure full utilization of resources.As you increase production of gadgets, you have to decrease production of widgets, and vice versa. Assume the unlimited demand of gadgets was 100 and widgets was 300. All points along and inside the PPF are attainable.If labor was not scarce, society would produce 100 gadgets and 300 widgets. Because society cannot meet the unlimited demand given the limited amount of labor, gadgets and widgets are considered scarce.Scarcity - limited resources Economics - the study of production, distribution, and consumption of goods and services Production Possibility Frontier (PPF) - a graph showing the possible production combinations of two goods given limited inputs After watching the video on scarcity, confirm whether you can: Did you know…We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities.Society would produce, distribute, and consume an infinite amount of everything to satisfy the unlimited wants and needs of humans.Everyone would get everything they wanted, and it would all be free. The decisions and trade-offs society makes due to scarcity is what economists study.

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