What Is Scarcity? Scarcity - A Central Concept In Economics Economics Lesson and Definitions

[marcio 0]

In the field of Economics we find many fields. In this toturial i will be explaining scarcity and a few points you should know.In any economy comprising producers and consumers and given scare and costly resources, a choice needs to be made about:1. What products and services should be produced?In order to answer this question we need to determine the needs of individual consumers as well as the economy in general. In al economy's a wide range of goods and services need to be produced in order to cater for the many and varied needs of consumers. The demand from consumers will normally determine what products and services to produce. The resources available for production purposes will also have an influence on the goods and services that are produced.2. How much of each product and service should be produced?The amount of each product to produce will be determined by the demand for the various products as well as the availability of the resources required to produce those goods and services.3. What resources should be used to produce products and services?The availability of the necessary resources may have a negative effect on the ability of an economy to produce the goods and services that consumers require. the economic resources required by a community to produce the necessary goods and services are known as the factors of production. They are land, capital, labor and entrepreneurship. A community therefore needs to have sufficient amounts of these resources in order to produce the required products and services. For example, a country may not have the land available to grow wheat required to produce bread for its consumers. It may however have more than enough capital and labour to produce computers. It is under such circumstances where countries are endowed with varying amounts of resources that trade between different countries takes place. We will examine the manner in which international trade takes place in my other toturial.4. For whom should goods and services be produced?The demand for goods and services will largely determine for whom they will be produced. If for example, there are sufficient consumers requiring washing machines, producers will supply washing machines given that necessary resources are available. Goods are therefor produced for those consumers who demand the goods, and have the ability to pay for the goods demanded.

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