Q:

Why is scarcity an economic problem?

A:

Quick Answer

Scarcity is one of 51 concepts identified by the National Council on Economic Education. Scarcity is an economic problem because one of the main factors that drives economics is the relationship in supply versus demand; if something is in demand and also in short supply, it is more scarce and therefore garners a higher price.

 Know More

Full Answer

The field of economics looks at how purchasing decisions are made and what factors affect the choice to buy a given item. The principal of scarcity results from having unlimited wants in a world of restricted resources. The theory says that society has a limited means to produce, and therefore fulfill, all the desires and demands placed on a given market.

One simple example is produce shopping in a supermarket. When a fruit or vegetable is at its peak of production there is more of that food available and the price for it is lower than when that same item is purchased off season. When a food isn't in seasonal production, it becomes more scarce and then requires more resources to obtain than when it's plentiful.

The market availability of a demand, what it takes to produce or procure it, and the subsequent effect that has on prices are all factors in whether something is considered economically scarce.

Learn more about Sustainability

Related Questions

  • Q:

    Why are fossil fuels non-renewable?

    A:

    Fossil fuels are non-renewable because they take millions of years to form. Fossil fuels make up most sources of non-renewable energy, and they were created millions of years ago as a result of marine creatures decaying under immense pressure and heat.

    Full Answer >
    Filed Under:
  • Q:

    What are the pros and cons of clearcutting?

    A:

    Advantages of clearcutting include the ability to manage forests economically, the creation of sunny spaces for sun-loving plant species, and the development of forage habitats for deer, elk and wildlife. Disadvantages include the disruption of existing ecosystems, the unsightly appearance and increased risk of erosion.

    Full Answer >
    Filed Under:
  • Q:

    How does solar power work?

    A:

    According to the Solar Energy Industry Association, solar power can involve generating current directly from the action of ultraviolet radiation on treated silicon using the sun's heat to boil water and drive an electric turbine with steam. Small-scale solar power installations, such as those on a private residence, usually use photovoltaic cells. Industrial-scale solar power plants tend to use solar thermal technology to create power.

    Full Answer >
    Filed Under:
  • Q:

    What are some examples of a self-sufficient home?

    A:

    Self-sufficient homes, such as HOUS.E+, do not rely on outside sources for water, energy or waste removal. Geothermal or solar energy and rainwater are often used as resources in self-sufficient homes.

    Full Answer >
    Filed Under:

Explore