pcecon.com Class Notes
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Scarcity
We had some interesting and lively discussions on this. The following is a summary of several classes' discussions, so there is more here than was discussed in your own class.
Scarce Goods and Free Goods
Anything that any person wants but has less of than he or she wants can be considered a scarce good. Another way to think of a scarce good is that some people (although not necessarily everyone) wants it, but less of it is available or being used than people want.
In other words, a scarce good must (1) be a good (something that someone wants) and (2) be scarce (be available in amounts that are less than the total amount wanted or not possessed by people in sufficient amounts to satisfy all of them).
EXAMPLES OF SCARCE GOODS from class discussions (from all classes) are health, happiness, hope, love, security, safety. These are some of the intangible scarce goods. In addition there are the more obvious things like money, food, cell phones, and other physical items. Trash is not a scarce good if no one wants it (although some kinds of trash, such as recyclable aluminum cans, could be a scarce good, since they have some value to someone and there is less of those kinds of trash than someone might want to have or use).
Perhaps a couple of folks were confused by my saying that a good is scarce if the amount of it is limited. Don't infer that "limited" means you could never get or make more than you now have. Rather, the amount of a scarce good is "limited" as opposed to infinite. You might increase the amount of a scarce good, but the amount now available is less than the amount desired.
Goods that are not scarce are called "free goods." A free good can be obtained without cost or effort. There are not many non-scarce (free) goods.
Air might not be scarce (if we ignore the muscular effort to breathe, don't care how clean the air is, don't go SCUBA diving, don't fly in an airplane, and don't climb a mountain). However, CLEAN AIR is a scarce good. I would also argue that air is scarce for anyone who at this moment wishes he had more air in his tires, would like a breeze blowing across his sweaty forehead, wants to open a window in a stuffy room, or wishes that a birthday party balloon was inflated.
In a few discussions, it was also suggested that existence and thought (consciousness) might be free goods. These are sort of philosophical, but I guess just existing right now is a free good, in that you and I have all the existence that we want (we have "being"). Still, for each of us, maintaining the kind of existence we want (life, presumably) into the future will require some effort. As for consciousness, a similar logic might be applied in the here in now, although the ability to focus thoughts is certainly scarce.
In one class, someone suggested that water is not scarce, but clearly not everyone who wants water can have as much as they want, where they want it, and with the qualities they want without putting forth some effort or paying for it somehow. A's in your class are also not free, since you don't already have all of the A's that you want in economics. You could obtain an A, after some effort, but the number of officially recorded A's in your class is right now zero, which is certainly a limited number and less than the number students desire.
Scarce Resources
As the book and class discussions brought out, resources are scarce.
The results of Scarcity
The book mentions choices, such as
1) choosing which goods to obtain,
2) choosing how goods will be obtained or produced,
3) choosing who will get the goods.
Also, scarcity results in cost, conflict, and competition. It also may lead to collaboration, cooperation, and compromise. These all arise because of the choices listed above.
Copyright 2006 by Ray Bromley. For economics information, and other information about Ray Bromley, visit www.raybromley.com. Permission to copy for educational use is granted, provided this notice is retained. All other rights reserved.
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