Based on your research of economics, what is the basic economic problem, and how do
Most of us deal with it as we live our economic lives?
Basic economic problem and at times referred to as central basic problem is based on scarcity and choice. The scarcity of resources that are needed to satisfy human needs. The society has a choice of producing a particular good or service. Are the resources available in the economy used in operation of more hospitals or hotels? Is mobile technology advancement more important than food processing technology? Other than choosing these, the society has to choose which is the best way to produce the desired goods and services? The most favorable and preferred way of using the scarce resources.
There are many ways through which people try to solve the economic problem. To solve economic problem, one has to deal with the problem of scarcity. There are different approaches to this such as by looking at opportunity cost. This means saving on production by using the scarce resources for better produce. We go for the best alternative amidst many and one which involves less cost of production but more profitable end products. However people will always waste resources and especially scarce resources without considering the economic problem. Don't use plagiarised sources.Get your custom essay just from $11/page
Based on your research of economics, what is the basic economic problem, and how do
Most of us deal with it as we live our economic lives?
One of the significant economic problems is economic scarcity. This phrase refers to limited goods and unlimited wants. In other words it is the scarcity of goods and when scarce goods cannot be repaired. For instance, water is economic scarcity. High population growth in the African and Asian countries and in Latin America, added up with high economic growth together with the poor living standards show that the demand is more than the supply in most nations all over the globe. Other than these, another large contributor to the imbalance between demand and supply is the global trade and water footprints. For example, water scarcity could result from the exportation of large amounts of water. The growth of industries has also led to waters scarcity since most industries use water as raw material. In addition, industrial development has led to pollution of very many water sources which has also promoted to water scarcity. Water scarcity has also resulted from drought, wastage by humans among many other reasons.
People and countries have tried to come up with this problem of water scarcity. Given the fact that water is one the most important resources needed for human existence, it is necessary to ensure that the demand meets supply. In the United States for instance, there have been measures to ensure this. Some of these measures include ensuring that water-efficient plumbing is used in homes and other ways. In my opinion, wastage of water by people is by far the biggest contributor to water scarcity. Most people leave taps running and rarely fix dripping taps. Even before we blame governments and others, we should first take up the responsibility of recycling and conserving water.
From an economic perspective, do you agree or disagree with this statement: If people
Are independent parties, no transaction takes place unless both parties benefit.
I’m in agreement with the fact that in the majority of the population, a voluntary exchange will only happen when there is a mutual benefit to both parties. The definition of a free market by economists is one which there is a willing buyer and willing seller. Anyone is free to participate in the free market. Each person has the freedom to choose whether to reduce or consume any product they chose. It is therefore entirely upon both parties to choose whether to participate or not when they feel they are both benefiting.
If incase one of the parties does not benefit from the transaction, then they can choose not to be participants in a free market. The agreement has to be entirely voluntary by both parties. In this context, one of the parties could chose to participate in a transaction even though they will not entirely benefit equally to the other party, but has a chance of ripping equal or more benefit in future. However, if they feel that there is no chance of benefiting either presently or in future, then the transaction cannot take place.
From an economic perspective, do you agree or disagree with this statement: If people
Are independent parties, no transaction takes place unless both parties benefit.
Parties that are not dependent of other parties or people have no commitment to others and therefore are free to choose what benefits them more or what suits their personal interests. They need no one’s approval to choose whatever they want to choose. Independent parties rely on themselves in making decisions and therefore, they only have their best interests. If people therefore are independent parties, they will only chose what they benefit from. A transaction between independent parties will only take place when both parties benefit since none of the parties is compelled to choose that which does not benefit them.
The independence of parties in a transaction could be referred to as economic freedom. Just as political freedom where one is free to choose a leader of their choice, it is the same way with economic freedom. One is free to choose that which is only benefiting to them. Not unless both parties within the transaction benefit whether directly or indirectly can the transaction take place.