In: Economics
Provide an example of scarcity problem that affects an
individual consumer.
Which economics principles govern the situation you described?
The problem of allowance of resources develops because of the shortage of resources. Now, let's discuss an example of a concern of deficiency that affects a private customer. Expect I prepare to spend $2000 on a fantastic night in Vegas, that means $2000 less than I needed to invest in other things, such as a diamond pendant for myself, or college tuition for your kids due to minimal resources. This restricted resource is needed for other things also. Take an example of US economy for, during Katrina when oil ended up being costly, people will have to cut on spending to afford oil for their cars and houses.
Deficiency restricts choices and needs choices, this is the condition of having to choose among various alternatives. To get more of one thing, a person passes up the chance of getting the next best thing. Therefore in the above-discussed example, we can apply the concept of opportunity expense. When making any choice, decision-makers need to consider the chance expenses of each alternative course of action.
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