Scarcity of Resources

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Scarcity of resources is an economic problem caused by man unlimited wants yet the available resources are limited. Various economic decisions have to be made due to the scarcity of resources in order to ensure that the limited resources are well distributed in an efficient way. Scarcity therefore is no about lack of riches but it is due to the limited resources in an economic point of view. The three major resources are capital, labor and land and in order to fulfill human want critical decision have to be made which will ensure that top priority wants are fulfilled while some can be traded off Cohn , 2008, pp 3).


The society we live in is a capitalist society. People in power should realize that owning too much of the resources may damage and oppress the others and in order to ensure that the resources are shared with those in the low class, they should learn to forego some of their wants. Equitability of the limited resources ensures that every individual is happy and contend with what he/she has.


Scarcity of resources happens due to low supply of labor, land, entrepreneurship and capital which is of high demand. People have to pay much in order to attain them this creates an inflation in the society. scarcity in a free market  can  be due to  increased of  demand  which can be affect, the peoples purchasing power, high population density  high  birthrates and the  trend of popularity of a certain commodity. Scarcity in a fee market can also be attributed to supply depletion seen through the changes in the economic situation which affects the spending habits of people and also because of the disruption of sources of production either through natural disasters or man made practices.


Demand increases due to scarcity of resources either through a product demand r supply which leads to an increase of costs of the product. People are also willing to pay   more in order to get the scarce product.  Corporations which are highly successful in today’s world are those holding the very scarce products and services. Such corporations deal with food production, copper, lumber oil and coal among other. When a product is readily an available to everyone the product is not expensive and many companies do not aim at dealing with these readily available products because they cannot make   much profit from the goods (Eatwell, Millgate, Newman, 2001, pp 253).


Economist today measures scarcity of resources by examining the price level of the goods. Market rate for future  period  of  resources  such  as land and  non  renewable resources earns a market  rate of interests . This will make investors save and invest more on the non renewable resources such as coal gold, iron, zinc, natural gas, bauxite and nickel in order to receive higher prices in the future.


Addressing the issue of scarcity of resources is important for all the world leaders. Ensuring human security is closely linked to international security threats. The disasters caused by the change of climate leads to the increase of tension among regions of the world and high and massive migration. Resource inequalities and scarcity also increase poverty rate and leads to high risk of people engaging in conflict. The scarcity of resources makes a region of the world to be underdeveloped. This subsequently leads to a weak form of governance as well as making it hard to overcome the challenges of scarcity of resources (Riley, 2006)


Population around the globe is increasing at a very high rate and statistics have shown that each year there is a population increase of 1.5 %.  This rate means that in the next half a century, the w world population will have doubled. This increased of people in the planet means that there will be various economic constraints due to the limited resources such as those in the natural environment will be stressed.


Economic development will also be hindered by the high scarcity of the natural resources. It is therefore to address the issue of the limited resources today to avoid the scary consequences ahead. The government policies should be set to limit birth rate and to encourage the use of family planning. The governments should  also see ways of   investing in the needed resources such as planting of trees and making investments high will promote a stable economy in the future (Simpson , Toman,  and Ayres2005, p121).


In conclusion, addressing the issue of scarcity of resource involves a whole spectrum of ideas from various disciplines like geography, environmental sciences, sociology, and economic. Scarcity of resources greatly affect the market value if a that product.  Human needs are infinite while the economic resources are very limited. For a society to be seen as a developed society, the society should be able to create new needs and wants of the people by supplying the wants by using   the already available production factors. Scarcity of resources involves making choices by governments, firms and consumers. This involves giving up some items and choosing others instead which is called trading off.


Reference:

Riley G (2006) Scarcity and Choice in Resource Allocation. Retrieved from

http://tutor2u.net/economics/revision-notes/as-markets

On February 21, 2011

Eatwell, J. Millgate, M., Newman, P. (2001). The New Palgrave. A Dictionary of Economics. . Palgrave, Houndsmill. pp. 25354.

Cohn, J (2008) What Is Scarcity of Resources? Publisher Crabtree Publishing Company,

Simpson R, Toman M and Ayres R (2005) Scarcity and growth revisited: natural resources and the environment in the new millennium, Publisher Resources for the Future,

 

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