Scarce Resources Essay Example | Topics and Well Written Essays - 1000 words

Scarce Resources - Essay Example He has the tendency to demand resources even though he does not need them. He may need a mobile phone. But, due to the enticements he receives from TV commercial and other forms of advertisements, he might want more features and capabilities of this product that is beyond his personal and professional needs. The truth that resources are scarce and humans have unlimited wants comprise the economic definition of scarcity. According to Investopedia, scarcity is "the basic economic problem which arises from people having unlimited wants while there are and always will be limited resources." Scarcity is an economic fact that points out the global condition wherein human wants outnumbers "the available supply of time, good and resources (Scarcity vs. Abundance)." This is the fact on which the science of economics is founded on. Resources, especially the non-renewable ones, are limited in its existence. It is therefore the job of the economists and managers to use them efficiently and effectively for the extending its use in its fullest potential. In all aspects and all levels of the economy managing the scarce resources plays a vital role. From households, community, to the national and the international level, proper allocation, distribution, and use of resources is very much needed. Whether it may be the buying of ingredients used for cooking a meal or imposing tariffs and other international trade policies on different commodities and services, effective management of resources is a critical responsibility shouldered by the household managers. For efficient resource distribution economists should do various economic decisions. Usually economic managers, from a household to a global setting are obliged to make trade-offs to maximize the use of different resources. Trade-offs are made when choices are made (collectively or by an individual) to get less of one resource to get more of others (Johnson). If, for example, a mother has to choose between purchasing bread and mayonnaise for her household, she has to make sure that the trade off made will be beneficial to optimize the satisfaction of her family. To evaluate the effectiveness of trade-offs made, opportunity costs should be highly considered. Opportunity cost is the highest esteemed or valued alternative that must be sacrificed to get something. In our last example the mother might consider that the value of bread is greater than the value of the mayonnaise on the basis that it is consumed more. The opportunity cost will be greater if the mother buy more mayonnaise than bread. In this scenario, we can say the trade-off is not economical. Scarcity in Households Jelin (1990) considers a household as social unit consisting of "undifferentiated set of individuals who equally share all activities linked to its maintenance." It is the most basic of social organizations, "a microcosm of relations of production, reproduction, and distribution." In a household setting, the allocation and distribution of resources is dynamic depending on its adaptation to internal and external influences. Daily activities in a household are highly influenced by political, social and other institutions. With all these changes in a household's daily activities the need of effective resources management is very necessary.