A popular video program, used to teach primary school children about economics, defines scarcity as "when you don't have enough of something." Evaluate this definition based on your understanding of the scarcity concept
This definition is a bit simplistic for college understanding. The video uses the example of three hats and four children to assert a scarcity of hats. We would more properly view this as a shortage of hats created because the hats, as presented, have no price. The shortage can be eliminated but scarcity cannot. Scarcity is the fundamental concept from which economics derives. Besides resources, virtually all other things, including your time, are scarce. Your textbook's definition will serve you better than the one from the video.
You might also like to view...
In an open economy, increases in government spending can crowd out consumption, investment, or net exports
Indicate whether the statement is true or false
If you buy a put option on Treasury futures at 115, and at expiration the market price is 110, the ________ will ________ exercised
A) call; be B) put; be C) call; not be D) put; not be
In a monopoly, the price is set when the firm ______.
a. chooses the most profitable spot on the demand curve b. chooses the highest output on the supply curve c. is forced into the least profitable spot on the demand curve d. is forced into the lowest output on the supply curve
Answer the following questions true (T) or false (F)
1. Monopolistic competition differs from oligopoly in that in monopolistic competition firms act independently while in oligopoly firms act interdependently. 2. An entry barrier exists when firms in an industry charge the lowest price possible for their products. 3. If economies of scale are significant, the typical firm will not reach the minimum point on its long-run average cost curve until it has produced a large fraction of industry sales.