What Makes A Resource Is Scarce? Why Is The Concept Of Scarcity Important?

1341 Words Aug 27th, 2016 6 Pages
1. What determines whether or not a resource is scarce? Why is the concept of scarcity important to the definition of economics?
Scarcity occurs when your wants or desires are essentially unlimited but the goods are scarce. The problem is that resources are limited, so you have to choose which of your desires to fulfill. But whenever you do choose your wants, you also must also sacrifice some of the others. Without scarcity, there would be no economic problem and no need for prices. There wouldn’t be prices because everyone will have everything and won’t need anything.

2. Scenarios
a. Whether to go to college or work force full time.
Rational self-interest affects both options because some may think having a degree could get them a higher paying job, thus able to afford more luxuries and desires. Some may believe starting a job right away will be the best choice in the long run because they will be getting experience on the job instead of wasting time getting an education. Depending on what your career choice is either option will be beneficial and detrimental. Each has benefits and costs.
b. Whether to buy a new textbook or a used one.
Each will have the same effect in your education, but different effect in the pocket book. With a new textbook you pay more and you don’t have to worry about damages. Used books often come with writings or missing pages which could affect an assignment, but substantially cheaper.
c. Whether to attend a local college or an out of town…

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