Last Updated 27 Jul 2020

The Role Of Scarcity In Economy

Category economics
Essay type Research
Words 961 (3 pages)
Views 480

There is Never Enough of Anything Abstract In this essay I will assess how the role of scarcity takes place in our economy and in our daily life, and also I will describe how different political and economic models have developed to solve the problem of scarcity. In addition, I will talk about the role of the government in today's economy, and I will compare and contrast capitalism vs.. Corporatism. To do so it will rely on key economic concepts such as; incentives, opportunity cost, graphs, and to do so the essay will rely on primary and secondary sources.

In this essay I will emphasize on problems that humans face in their daily lives. Finally, I will prove that economics is part of each day of our life. Economics By Gerontologist choices and calculate how to ration various items and resources that we consume, produce and utilize. ' Kurt Bills). Scarcity describes the idea that in a world with finite resources people have unlimited wants and therefore humans are forced to make choices in order to use their finite resources in the best way possible. Some of the finite resources that humans deal with everyday are; money, time, goods, natural sources, etc.

Poor distribution of resources, rapid increase in demand, and a rapid decrease in supply are some causes of scarcity. Scarcity is everywhere. For example, in resources, capital, labor, and even time, where there is not enough to satisfy human needs and wants. In addition, scarcity is one factor that rules over and moves the economy. If scarcity would not exist, humans would not be able to make decisions to survive, and humans would not be forced to develop new inventions and different economic and political systems simply because of the fact that there wouldn't be a need for them.

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It is the constant fight of human kind against lack of resources that allows innovation to exist. However, because of scarcity , choices are made by consumers , businesses and governments. For instance, thousands of people travel into Vancouver each day and they make decisions about when should they travel, whether to use the bus or another public transportation to get to their work or work from their home. Millions of decisions are taken, many of them are habitual but somehow almost everyday, people get to work on time and they get home too in safety or if not in comfort.

Humans to deal with scarcity created political systems. Communism, socialism, capitalism and fascism are four main political systems that ruled most of the economies of the world during the XX century. Capitalism is mainly of is basically, people control how things are, not the government. Communism means that everybody is equal. For example, a teacher would get paid the same as a carpenter work. In addition, in socialism the government runs everything. Distribution of goods is a main idea. For example in North Korea, you are given a certain amount of food and water each week.

Furthermore, in Fascism a leader is mainly given off with absolute power. Communism and Fascism have states with a tighter control over the economy and few freedoms, on the other hand, Socialism and Capitalism have less control over the economy but they have more freedoms. An example of a natural process while dealing with scarcity is when Labor Unions are lose their power and the inadequate system is preparing the way for a new political system. A political system evolves or changes so does its economic system.

The main economic systems are traditional system, market, command, and mixed system. Market economy is based on the consumption choices of consumers while Command economy is based on the idea that the government should have a strict and tight control over the A way to deal with scarcity is by determining the cause of the problem, then changing the way of distribution and changing the price to correspond to society's conditions. If there is no rise in the prices of the product to discourage buyers from unnecessary spending, then the resources will become increasingly scarce.

In addition, the increasing of importations when national supplies are not enough to ensure can help to deal with scarcity; for example Mexico sells the oil that is founded in the country to U. S. A. As the price is chip and U. S. A do not have the amount of oil that the citizens need. Finally, the government must restrict demand artificially with rationing in the countries where are usually used. Rationing is a temporary emergency measure when supply cannot satisfy demand and no effective solution is immediately available. An economic choice is deciding between different uses of scarce resources.

Making Economic Choices presents practical economic concepts such as scarcity, apply, demand, taxes, interest rates, etc. To make a choice, there must have been more than one alternative. The alternatives are so much that the resources available at the individual's disposal are not capable of satisfying these alternatives. Therefore, a choice of the most urgent alternative or the most important alternative is made. However, without scarcity of resources, all the resources will be at our disposal and there will be no need to choose between alternatives, rather, everyone would be satisfied all the time.

The basic economic problem is about scarcity and choice. Every society has to decide: What goods and services to produce? How best to produce goods and services? Who is to receive goods and services? Most important life decisions are made using economic reasoning. Nonetheless, the invisible hand theory is a concept created by Adam Smith in the 18th century. The invisible hand theory states that individuals pursuing their own interest frequently promote the good of society than when he really intends to promote it, in other words each of us act in our own self- interests.

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The Role Of Scarcity In Economy. (2018, Mar 08). Retrieved from https://phdessay.com/the-role-of-scarcity-in-economy/

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