Question

Suppose the fossil fuels becomes much scarcer in the next 50 years. With a growing global demand for energy in the looming threat of rising global temperatures, it would seem to be a recipe For a dramatic decrease in the Growth rate of economic activity. why do you many economists believe the economies can continue to well, even in the face of resource scarcity? Explain your answer.

Answer 1

Many economists believe that even if the fossil fuels become much scarcer in the future and the economic activities decline owing to rising pollution as the demand for fuels increase, the economy will still function well. This is because economists know that in an economy, the wants of individuals are unlimited and the resources available are limited, which makes them scarce. That is why they deal with efficient allocation of resources, such that every individual is to make choices that would best suit their preferences and satisfy their needs. There is an opportunity cost when a choice is made as the next best alternative is given up. However, in economics, the allocation of resources efficiently depends upon the choices individuals or the society as a whole make and economists believe that even if the resources deplete and only a few remain, the society as a whole will be able to make choices that would best suit their preferences and will be able to sustain their basic needs and thus, the economy will perform well.