An Overview of the Economic Problem
In this post, we will talk about the economic problems including wants, resources and scarcity as part of the Prelim Economics Course. In economics, we have a continuous problem that we must solve. The economic problem refers to the idea that the world’s finite resources are insufficient to satisfy all human needs – in other words, the economic problem asks us how society fulfils its unlimited wants with limited resources. Economics involves the study of how to allocate resources in conditions of scarcity.
What is ‘Scarcity’?
Scarcity in economics talks about how there are finite resources on Earth which society uses every day. Whilst some resources are renewable, many resources are being consumed faster than they are being produced. An example of this is environmental resources.
Watch this video below to further your understanding of the economic problem.