1.3.1 Scarcity
Completion requirements
The concept of economic scarcity refers to limited resources, and not to limited riches.
Sixty hectares of land can produce a specific amount of corn, OR wheat, OR cotton, OR it can provide food for a set number of cows (grazing capacity). But it cannot do all four.
If we re-designate this land from agricultural use to residential use, for example, one hectare of land can house a single family or 250 families.
Well-planned economic decisions are necessary to allocate scarce resources efficiently. We must make choices to satisfy our needs and fulfill our wants because the resources necessary to do both are limited.
Sixty hectares of land can produce a specific amount of corn, OR wheat, OR cotton, OR it can provide food for a set number of cows (grazing capacity). But it cannot do all four.
If we re-designate this land from agricultural use to residential use, for example, one hectare of land can house a single family or 250 families.
Well-planned economic decisions are necessary to allocate scarce resources efficiently. We must make choices to satisfy our needs and fulfill our wants because the resources necessary to do both are limited.
Sixty hectares of land can produce 100 bushels of corn.
Sixty hectares of land can produce 25 bushels of corn and 80 bushels of wheat.
Sixty hectares of land can produce 25 bushels of corn, 20 bushels of wheat, and 60 bushels of cotton.
Sixty hectares of land can produce 25 bushels of corn, 20 bushels of wheat, 15 bushels of cotton, and support 10 grazing cattle.
The decisions we make involve trade-offs. We give up one want to satisfy another.