What is scarcity – quora gas mask bong nfl

For example, the supply of water near the ocean may not be “scarce” if your interest is simply in getting wet. But when it comes to farmers who want to use water for their crops and they live far from a water supply, then there is scarcity. Any efforts put into bringing them water are efforts that could be used for other purposes. Those other forgone activities are called costs. Price systems are a way to convey those costs to consumers.

When you have scarcity, you need some form of rationing. How much should each person get and who decides? This can be decided by some central authority as in communist systems or by a price system as in free markets. In the latter case, profits encourage people to provide more of things which are highly desired. The supply rises to meet the demand, as much as possible under the circumstances. You also tend to get competition to outdo other sellers, innovation and rapid adjustments to changes in the preferences of buyers to maximise profits and minimise losses.

One of the tragedies of life is that we can’t have all things all the time whenever we want them (a common cause of tantrums for kids and adults alike). To recognise this simple fact is to understand the concept of scarcity. One of the best ways to make sure you get your “fair share” of what exists or can be provided (in capitalist societies) is to find a way to satisfy the desires of others. Money can quite accurately be described as receipts for services rendered redeemable in favours from others. It’s really just socialism with a tracking system.

An important note: there is usually no set amount of a good or service. Rather, the amount supplied depends on the circumstances. If there isn’t enough of something, including a certain kind of worker, typically the price will go up, attracting more of it.

For example, if a disaster strikes and suddenly everyone needs a flashlight in some area, it’s in the interest of people to meet that demand in order to make a profit. A sudden increase in the supply is likely, as long as prices are allowed to function (meaning a temporary spike in the price of flashlights). Local people who have flashlights they don’t really need may be willing to sell them with such high prices. Local stores will happily call in extra supplies and pay more to get express delivery in order to beat competitors. Prices will eventually subside once the supply sufficiently increases.

The net effect is that the needed resources rapidly move to the disaster area and those who facilitate this most efficiently are rewarded. But under price controls which make “price gouging” illegal, the motivations to meet the demand no longer exist and the flashlights will go to those first in line, rather than those who most need it. It may not be possible to fund the rapid transport of extra supplies without accruing a loss. Also, people are likely to illegally exchange at rates above the gouging limit anyway.

An analogy: Socialism is like asking some kids to clean a room. Capitalism is like saying “whoever cleans the most gets a lolly”. They are two different approaches to making the most of scarce resources, of which human skills and effort are among the most valuable.

Think about the scarcity of toxic waste. Good. Now that you have thought about how much there might be in the world you may know it to be something that people don’t go out looking for to make a fortune on, unless you own a hazardous waste cleanup company. While the amount of toxic waste in the world can be described as “scarce” it cannot be said that humanity has a “shortage” of it. Nobody wants it around, hence it has little value to a huge majority of us. If everybody wanted toxic waste because it held some great benefit (prolonging our lives while simultaneously destroying the ecosystem) then its value would skyrocket. See.

But what about other things that help us lose that extra weight in the wallet like diamonds to put on women’s fingers? Diamonds are actually a very abundant natural resource. But around the world the demand for them to place in jewelry or into cutting devices is great, hence diamonds are very pricey but are practically useless for anything else. Water on the other hand is essential to life yet costs basically nothing.

There is also the factor of obsolescence. For instance, think of the old Sony Walkman cassette player. There may be many of them left, but far fewer than there used to be. Even if their numbers fell to about a thousand worldwide, their cost at yard sales and on Ebay would stay flat. Why? Because that technology has been replaced by something more desirable. The continued growing scarcity of Sony cassette players will fail to raise their value because demand for them is essentially non-existent.