Scarcity in Economics

Definition: Scarcity refers to the fundamental economic problem of unlimited wants and needs, but limited resources to fulfill them.
Characteristics:
- Unlimited wants and needs
- Limited resources (time, money, labor, etc.)
- Choice and trade-offs necessary due to scarcity
Implications:
- Forces individuals and societies to make choices about how to allocate resources
- Leads to opportunity costs (value of the next best alternative given up)

Definition: An economic system is a framework for organizing economic activity, including production, distribution, and consumption of goods and services.
Types:
1. Command Economy:
  - Government makes most economic decisions
  - Central planning and control
  - Examples: North Korea, Cuba
2. Market Economy:
  - Individuals and businesses make most economic decisions
  - Free market and private enterprise
  - Examples: United States, Canada
3. Mixed Economy:
  - Combination of government intervention and private enterprise
  - Balance between social welfare and individual freedom
  - Examples: Sweden, France

Definition: A situation in which the supply of a good or service equals the demand for it, resulting in no excess supply or demand.
Conditions:
- Supply equals demand (Qs = Qd)
- No tendency for price to change
- Equilibrium price and quantity
Characteristics:
- Market clearing price and quantity
- No surplus or shortage
- Efficient allocation of resources

Definition: The process of assigning resources to different activities or projects to maximize efficiency and minimize waste.
Types:
1. Command Resource Allocation:
  - Government allocates resources
  - Central planning and control
2. Market Resource Allocation:
  - Individuals and businesses allocate resources
  - Prices and market forces guide allocation
Goals:
- Efficiency: maximize output with given resources
- Equity: fair distribution of resources
- Growth: allocate resources to promote economic growth

Scarcity is the fundamental economic problem of unlimited wants and needs, but limited resources to fulfill them
It has two main characteristics: unlimited wants and needs, and limited resources (time, money, labor, etc.)
Scarcity leads to choice and trade-offs, and forces individuals and societies to make decisions about how to allocate resources
Opportunity costs arise due to scarcity, which is the value of the next best alternative given up

An economic system is a framework for organizing economic activity, including production, distribution, and consumption of goods and services
There are three main types of economic systems:
Command Economy
- Government makes most economic decisions
- Central planning and control
- Examples: North Korea, Cuba
Market Economy
- Individuals and businesses make most economic decisions
- Free market and private enterprise
- Examples: United States, Canada
Mixed Economy
- Combination of government intervention and private enterprise
- Balance between social welfare and individual freedom
- Examples: Sweden, France

Market equilibrium occurs when the supply of a good or service equals the demand for it, resulting in no excess supply or demand
The conditions for market equilibrium are:
- Supply equals demand (Qs = Qd)
- No tendency for price to change
- Equilibrium price and quantity
Characteristics of market equilibrium include:
- Market clearing price and quantity
- No surplus or shortage
- Efficient allocation of resources

Resource allocation is the process of assigning resources to different activities or projects to maximize efficiency and minimize waste
There are two main types of resource allocation:
Command Resource Allocation
- Government allocates resources
- Central planning and control
Market Resource Allocation
- Individuals and businesses allocate resources
- Prices and market forces guide allocation
The goals of resource allocation include:
- Efficiency: maximize output with given resources
- Equity: fair distribution of resources
- Growth: allocate resources to promote economic growth

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