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a. What is scarcity and why does it exist?
i. classical (capitalist-in the text...
Oct 30, 2023
a. What is scarcity and why does it exist?
i. classical (capitalist-in the textbook),
ii. graphical illustration of (i),
iii. Marxist.
answer:
Scarcity refers to the limited availability of resources in relation to unlimited wants and needs. It exists because resources are finite while human wants and needs are infinite.
Key Concept
Scarcity is the fundamental economic problem that arises due to the imbalance between limited resources and unlimited wants.
Explanation
Scarcity forces individuals, businesses, and societies to make choices about how to allocate their limited resources in order to satisfy their unlimited wants and needs. This concept is central to understanding the fundamental economic problem and the need for efficient resource allocation.
answer:
i. Classical (capitalist-in the textbook):
In classical economics, scarcity is seen as a natural and inherent condition in any economic system. It is the driving force behind the need for individuals and businesses to make choices and allocate resources efficiently.
Key Concept
Classical economics views scarcity as a universal and unavoidable condition in all economic systems.
Explanation
According to classical economists, scarcity exists because resources are limited and cannot fully satisfy all human wants and needs. This scarcity necessitates the allocation of resources through market mechanisms, such as supply and demand, to ensure efficient resource utilization.
answer:
ii. Graphical illustration of (i):
In a graphical illustration, scarcity is represented by the downward-sloping demand curve intersecting with the upward-sloping supply curve at a point of equilibrium. This intersection represents the allocation of scarce resources to meet consumer demand.
Key Concept
Graphical illustrations depict scarcity through the intersection of demand and supply curves.
Explanation
The graphical representation of scarcity shows how the limited availability of resources leads to the need for trade-offs and choices. The equilibrium point represents the allocation of resources that maximizes societal welfare given the existing scarcity.
answer:
iii. Marxist:
In Marxist economics, scarcity is viewed as a result of the capitalist mode of production. It argues that scarcity is artificially created by the unequal distribution of resources and the pursuit of profit by the capitalist class.
Key Concept
Marxist economics attributes scarcity to the capitalist mode of production and unequal resource distribution.
Explanation
According to Marxists, scarcity is not a natural condition but a consequence of the capitalist system. They argue that the pursuit of profit and private ownership of resources leads to the artificial creation of scarcity, as resources are not allocated based on societal needs but on profit motives.Whatarethemainfactorsthatcontributetoscarcityinacapitalisteconomy?,Generatemeasimilarquestion© 2023 AskSia.AI all rights reserved