10 Questions
Why do most of us have to choose while shopping?
Because our wants are unlimited while our means of fulfilling them are limited.
What does scarcity mean in an economic context?
The situation where the supply of something is not sufficient to satisfy all wants.
Why is time considered a limited resource?
Because time constraints prevent doing everything desired.
What distinguishes necessary wants from other types of wants?
Necessary wants are essential for survival.
Why do even the very rich experience scarcity according to the text?
Because the supply of something is not sufficient to satisfy all their wants.
Why do economists see services like those provided by teachers and nurses as scarce?
Because the materials and labor needed to provide these services are scarce.
Why are cell phones considered scarce despite the high number of people owning them?
Because the materials and labor needed to build cell phones are scarce.
During Atlantic hurricane season, why does scarcity become a visible fact of life?
Because people stock up on goods like bottled water, causing shortages.
Even if everyone became extremely wealthy, would scarcity still exist?
Yes, because the resources needed for production would remain limited.
Why can't every multimillionaire build an elegant mansion despite being wealthy?
Because other essential resources like land, skilled workers, and materials are still scarce.
Study Notes
Scarcity in Economics
- Scarcity occurs because the needs and wants of individuals are unlimited, but the resources available to satisfy them are limited.
- In an economic context, scarcity refers to the fundamental problem of having unlimited wants and needs, but limited resources to fulfill them.
Time as a Limited Resource
- Time is considered a limited resource because it is limited in quantity and cannot be increased or replaced.
Types of Wants
- Necessary wants are essential goods and services that are required for survival, such as food, water, and shelter.
- Distinguishing necessary wants from other types of wants is important because necessary wants take priority over other wants.
Scarcity and Wealth
- Even the very rich experience scarcity because their unlimited wants and needs exceed their available resources, despite their wealth.
- Scarcity is not just a problem of the poor, but a universal economic problem that affects everyone.
Scarcity of Services
- Economists see services like those provided by teachers and nurses as scarce because they require a limited resource, such as labor, which is in short supply.
Scarcity of Goods
- Cell phones are considered scarce despite the high number of people owning them because they are made from limited resources, such as metals and labor, and require a limited amount of production capacity.
Scarcity in Emergency Situations
- During Atlantic hurricane season, scarcity becomes a visible fact of life as people's wants and needs for essential goods and services, such as food and shelter, exceed the available resources.
Universal Scarcity
- Even if everyone became extremely wealthy, scarcity would still exist because unlimited wants and needs would continue to exceed the available resources.
- Scarcity is a fundamental economic problem that cannot be eliminated by wealth alone.
Limited Resources and Wealth
- Even the wealthy cannot build an elegant mansion if the resources required to do so, such as land, labor, and materials, are limited and scarce.
Explore concepts of scarcity and choice through an examination of how our unlimited wants exceed our limited resources. Learn about the necessity of prioritizing needs and making decisions based on available means.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
