Scarcity is a key concept in economics and it is viewed as being a huge problem within economics. Scarcity refers to a situation where demand exceeds supply and this can apply to anything from consumer goods to raw materials. (financepractitioner). For example, scientists suggest that crude oil can run out in the near future due to the high demands for it but a lack of supply of it which suggests that crude oil is a scarce resource. Another example could be housing in the UK. There are high demands for housing in the UK but the supply of the houses is not meeting the demand which again suggests that it is scarce. However, if more houses are built, then eventually the supply of houses will meet the demand for houses, which indicates that the
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When making an economic decision there is nearly always an opportunity cost. According to investopedia, ‘opportunity costs refer to a benefit that a person could have received, but gave up, to take another course of action.’ For example, if the UK’s Government spend an extra £20bn on healthcare, the opportunity cost here is that they could’ve spent it on education and benefited from long run aggregate supply. Although there are various economic problems present, scarcity is far more significant as it has been around for many years. There are two fundamental paradigms that I will discuss within this essay and they’re exchange and production. Exchange is closely identified with the problems of scarcity and allocation of given goods. Production is closely identified with the problem of reproducibility. In this essay I will explain how these two paradigms are related to the problem of scarcity and how they address the …show more content…
According to Wikipedia, ‘economic development is the process by which a nation improves the economic, political, and social well being of its people’. There are many reasons as to why developing countries have not achieved economic development. One significant factor is the lack of government spending. If there is no spending in technology or education. Then production will be slow and inefficient. Also, the skill set of workers will be very low which again will affect the output of production. Many developing countries such as Nigeria have rich resources such as oil but still have not reached economic development or an advanced economic stage altogether. Again this is a result of a lack of investment and skill set of labour. South Nigeria is far better off than north Nigeria. This may be due to the fact that there is better infrastructure and transportation there than the north, which can benefit the effectiveness of exchange/trade. Developing countries such as Nigeria may not have reached such an advanced economic stage as other economies because they are growing on the basis of exchange rather than production. This means that their exchanges are one off and wealth is not continuously being generated. If the oil found in Nigeria were to be produced into new goods then exchanged, then wealth can be continuously generated. This suggests that there is no organisation in
When making an economic decision there is nearly always an opportunity cost. According to investopedia, ‘opportunity costs refer to a benefit that a person could have received, but gave up, to take another course of action.’ For example, if the UK’s Government spend an extra £20bn on healthcare, the opportunity cost here is that they could’ve spent it on education and benefited from long run aggregate supply. Although there are various economic problems present, scarcity is far more significant as it has been around for many years. There are two fundamental paradigms that I will discuss within this essay and they’re exchange and production. Exchange is closely identified with the problems of scarcity and allocation of given goods. Production is closely identified with the problem of reproducibility. In this essay I will explain how these two paradigms are related to the problem of scarcity and how they address the …show more content…
According to Wikipedia, ‘economic development is the process by which a nation improves the economic, political, and social well being of its people’. There are many reasons as to why developing countries have not achieved economic development. One significant factor is the lack of government spending. If there is no spending in technology or education. Then production will be slow and inefficient. Also, the skill set of workers will be very low which again will affect the output of production. Many developing countries such as Nigeria have rich resources such as oil but still have not reached economic development or an advanced economic stage altogether. Again this is a result of a lack of investment and skill set of labour. South Nigeria is far better off than north Nigeria. This may be due to the fact that there is better infrastructure and transportation there than the north, which can benefit the effectiveness of exchange/trade. Developing countries such as Nigeria may not have reached such an advanced economic stage as other economies because they are growing on the basis of exchange rather than production. This means that their exchanges are one off and wealth is not continuously being generated. If the oil found in Nigeria were to be produced into new goods then exchanged, then wealth can be continuously generated. This suggests that there is no organisation in