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Scarcity, Choice and Opportunity Costs - Term Paper Example

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The author states that the basic economic problem comes down to the scarcity of resources that leads to consumers having to make a choice and the choice that has been foregone is the opportunity cost. These three concepts are all interlinked and relate to each other at every step of economics…
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Scarcity, Choice and Opportunity Costs
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Download file to see previous pages Scarcity is defined as that realistic condition in which the resources are limited and that in return prevents human wants from being satisfied to the extent which is desired. (, Economic Scarcity in an Abundant World). This is the point where the economic problems formulate and the people in need of these resources are required to make choices between them. The scarcity of resources builds on their values and this in return favors those in demand of the resources. In other words, scarcity is what drives the economy. (, Economic Scarcity in an Abundant World). Economic scarcity is subjected to the demand for resources and how limited those resources actually are. This functioning together is what formulate the “Principle of Scarcity”. This law states that if the desire for a limited resource is in excess than the value of the resource increases accordingly. (, Law of Scarcity).
Scarcity is a real condition which prevents the wants of humans to be fully satisfied. It is where economic problems originate and what leads to humans having to make choices between things. (Simon). The section on how to manage scarcity is a primary concern for economists. The process to do so involves an exchange of resources which in return brings out the maximum amount of satisfaction that a society can obtain with given resources. A system of trade needs to be introduced for this to function. (Simon).
The concept of the free market shows a frictionless economy in which there is a balanced between demands and wants to tackle the problem of scarcity. (Archytas). The existence of economic factors always is a place to bring about the scarcity of resources.   ...Download file to see next pagesRead More
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