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Foundational Econ Problems
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The argument that the economy is a result of scarcity because a country must make choices on how to use its limited resources to meet the unlimited needs and wants of its population is an economic theory that takes into consideration the fact that supply and demand is what moves markets; in times of scarcity, demand equilibrium is unbalanced and prices rise until that balance is achieved. This makes it so that some goods are priced beyond the point where ordinary consumers could reasonably expect to obtain them. If this happened for such basic goods as food like grain or milk, scarcity would drive the country into a state of starvation and chaos. This can happen in third world countries where there is no strong infrastructure in place—but in a country like the U.S., the economy is not driven by scarcity so much as it is by the law of supply and demand.
Some researchers have attempted to show that scarcity does drive some markets in the U.S., such as water scarcity—but Rijsberman (2006) countered these arguments by indicating that scarcity is typically artificially created; there is generally more than enough competition in major...
and if there is great demand for something, someone will find a way to meet that demand and the creation of a competitive market will follow.
This situation of course changes from country to country and the issue of scarcity does begin to play a larger and more impactful role in countries that have not developed to the point where there are competitive free markets. In a competitive free market, the focus on what drives markets is entrepreneurship (Olssen & Peters, 2005). Countries that lack support for entrepreneurs are likely to suffer more from the problem of scarcity than economies that promote a free market.
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The economy is a result of human behavior because a country must prioritize its economic goals to determine how to deal with scarce resources. Some countries have a command economy, where the centralized government essentially sets the prices for all goods. This was the case in the Soviet Union where, for instance, the price of sugar was set and not determined by the principle of scarcity or the law of supply and demand. In the U.S., price fixing of this nature is supposed to be illegal, but in reality because of the…
demand: A Change in News Consumer Demand in Britain Pfanner, Eric. (28 Feb 2005) "British Papers Stem Losses, but the reader grows fickle." International Herald Tribune. From The New York Times. World Business News Retrieved 28 Feb 200528 Feb 2005 at http://www.nytimes.com/2005/02/28/business/worldbusiness/28paper.html? Consumer demand is fickle, particularly when it comes to non-necessary commodity goods and services. Media consumption, biologically speaking, is not a necessity. Nor do the physical productions of the
PRETZELS Supply and demand of Auntie Anne's hand-rolled pretzels Supply and demand of Auntie Anne's hand-rolled pretzels What are some things that would change the demand for your product? Demand for food, particularly non-necessary food items, can be extremely volatile. When the economy sours, consumers frequently cut back on eating out. Soft pretzels decidedly fall into the category of 'treat' food. However, many fast food restaurants may see improved sales during a recession, as
Supplies, Materials B) Parts suppliers, metal shapers, tire makers, etc. C) To make a profit and establish relationships with automakers and other customers D) Shippers might want to make more profit while people using the shipper want to keep costs down E) It can slow or shut down the movement of parts and supplies, like with a hurricane or volcano eruption A) The service, paperwork, pens, mail service, etc. B) Yes. Each firm is trying to
S. pp). For more than ten years, Chinese officials have stated that production from Chinese firms investing overseas is more secure than imports purchased on the international market (U.S. pp). In order to secure more reliable access, Chinese firms are being directed to invest in projects in the Caspian region, Russia, the Middle East and South America (U.S. pp). The National Intelligence Council's report also states that Europe's energy needs will
An adverse supply shock would be the opposite. The above Toyota example is a temporary supply shock, one from which the company has probably recovered at this point. But an adverse supply shock is more permanent in nature. Aggregate supply decreases permanently, and this increased scarcity is reflected in higher prices. For the shock to be permanent, there must be barriers to firms increasing production. If the firms in the
Scarce Land in Hong Kong Land, capital, labour and entrepreneurship constitute the four factors of production. These are referred to as factors of production because people need them in their economic production ventures. Hong Kong, like many fast growing cities with vast population, is running short of land. In fact, it is already, a scarce resource. Problems such as insufficient housing are all due partly to the scarcity of land. Land