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How do economic systems solve the problem of scarcity?
Member rating: No Rating | Words: | Submitted: Wed Oct 13 2004
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HOW DO ECONOMIC SYSTEMS SOLVE THE PROBLEM OF SCARCITY? Scarcity is not a new thing. Scarcity has always been with us and will be with us as long as we cannot get everything we want for free. Scarcity arises from the fact that resources (like land, labor and capital) are finite. Resources are the inputs used in the production of those things that we desire. Scarce resources are used to produce economic goods. Goods produced from scarce resources are also scarce. Thus, we constantly face decisions about how best to use them. Every economy has to decide 1) What will be produced? 2) How will it be produced? 3) For whom will it be produced? Scarcity forces us to choose. In fact, the concept of choice forms the basis of economics. Moreover, the choices that we can make are constrained not only by scarcity but also by political,...
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