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Scarcity (Econ)

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I don't understand economic scarcity, exactly.

Are drinking water, time, and education scarce? We pay for the first and last, so they are economic goods/services, right? And time is valuable, but not directly, I guess. Can someone help me?

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Scarcity is defined as a problem.

The problem of scarcity is how we have an infinitely long list of wants and needs that we want to satisfy using the very limited resources that we have. We don't have enough resources to fulfill all those infinite wants, so we have to figure out a way to get the most out of our resources and figure out how the tradeoffs of society are going to work - which things we're going to have to give up and which things we are going to use our limited resources on.

Education and drinking water (if you're talking about bottled water and such) are definitely scarce. As for time, I think that one's a little hard to put your finger on, but in my own views I think time itself isn't scarce, but time allocated to things can be. The way I see it is that if there isn't enough of something for everyone, then you can reasonably initially categorize it as scarce before you look at it in more depth.

Helpful?

Edited by Godstryke

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Thank you. I understand that part, but I can't seem to apply it. Are drinking water, time, money, education, and bicycles scarce? I think that's a relative term. I mean we pay for education. We pay for bicycles. We value money and time and drinking water. I can argue that these things are both scarce and not scarce, and I don't know which is the right way to think, so to speak.

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I think that's a relative term. I mean we pay for education. We pay for bicycles. We value money and time and drinking water. I can argue that these things are both scarce and not scarce, and I don't know which is the right way to think, so to speak.

Well, any good that is not scarce is a free good, and any good that is scarce is an economic good. So, you can look at it in reverse - if it's an economic good, then it's scarce.

Also, scarcity isn't quite just about what we value. For example, people value honesty, which is just as immaterial as time, but that's not exactly scarce (yeah, yeah, I know, bad thing to pick for an example) in quantity. An item's scarcity is more about how abundant it is - air, for example, is a free good. Scarcity might not always be constant, e.g. seasonal fruits could be scarce during parts of the year where they don't grow.

And finally, yes, there are ways to make things seem like they aren't scarce, but personally I think that's overthinking and overcomplicating things. Sure, there's ambiguity with some goods - it's unavoidable, really. However, scarcity isn't a means for categorization, it's a concept, and a very broad one at that. Not to mention that I can't really think of any goods that perfectly straddle the middle between scarce and abundant - for the most part the vaguer goods to consider are generally scarce or generally non-scarce rather than being exactly ambiguous. The term is somewhat relative but I doubt it's to a great enough extent that you'd find it impossible to make the call in favor of one side more than the other.

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Overthinking is what I do best. So I'll ask again in hopes of clarification. Are all of those things [drinking water, education, bicycles, money, and time] economically scarce? Bicycles, drinking water, and education are goods/services, so yes. But what about money and time?

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Overthinking is what I do best. So I'll ask again in hopes of clarification. Are all of those things [drinking water, education, bicycles, money, and time] economically scarce? Bicycles, drinking water, and education are goods/services, so yes. But what about money and time?

Depends on how you define things. If you talk about water you can make the distinction between drinking water and sea water; the former is scarce because it had to be processed by machines made by resources, while the latter could be considered abundant because about 71% of the earth's surface consists of water. Education and bicycles are goods and services, meaning that resources were required in order to produce/design them; as such they are considered scarce. Similar concept with money: if you're talking about the number of notes and coins existing in an economy, then yes, money is scarce - it required resources to be made. If you're running out of time you could consider time being scarce. However, if you have a year until your IB exams, you may consider time until that event being abundant. Bear in mind that, unlike water, time is neither a good nor a service, so it's up to you, I'd say.

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Kind regards,
IB Survival Staff
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