What Is the Relationship Between Scarcity and Choice?

The scarcity of resources means that relative to the infinite growth of human needs, resources are always limited within a certain time and space. Relatively insufficient resources have caused scarcity of resources compared with the absolute growth of human needs.

Scarcity of resources

Resources are scarce. On the one hand, the articles themselves are limited for a certain period of time; on the other hand, the technical conditions for using articles for production are limited, and human life is also limited. The scarcity of material means of living is caused by

Absolute scarcity is when the total demand for resources exceeds

The meaning of scarcity of production resources is relatively limited due to the scarcity of resources and economic problems due to

Resource scarcity

1. Laissez faire market economy system

The meaning of laissez-faire market economy system Laissez-faire refers to the economy in which the allocation of resources is determined by market supply and demand without the intervention of the government at all.

The characteristics of this system First of all, from the perspective of decision-making structure, laissez-faire market economic system is decentralized decision-making. Second, in a laissez-faire market economy, each person or economic unit is given the motivation to pursue personal interests. Third, the message in a laissez-faire market economy is transmitted through price fluctuations.

How a laissez-faire market economy system solves the problem of resource allocation. In a laissez-faire market economy, families or individuals use their own satisfaction as the motive and market prices as the information to independently determine the purchase amount of each product. Producers are motivated by profits. According to the market price, the method of production and the amount of inputs purchased are determined; the interaction between households and producers determines the price and quantity of goods produced.

2. Centralized planned economy system

The meaning of a centralized and planned economic system is a plan in which the central authority or agency decides what to produce, determines production goals and production methods, and specifies distribution rules.

Centralized decision-making. Centralized decision-making is based on public property rights. How to solve the problem of resource allocation Through the adjustment of plans, the centrally planned economy determines the allocation of social resources.

3. Mixed economic system

The meaning of a mixed economic system is an economic system in which the government and the private sector make decisions in accordance with certain principles. The characteristics of the mixed economy are the combination of decentralized and centralized decision-making. The driving force of the decision-making unit can be either its own economic benefits or social target information transmission. It has both spontaneous price fluctuations and feedback from planned instructions.

(4) Resource allocation in a mixed economy How does a mixed economic system solve the problem of resource allocation? In a mixed economy, through the spontaneous role of the market mechanism, the economy and society solve the basic problems of what and how much is produced, how to produce and for whom, in the market When the mechanism fails, government intervention is used to promote the efficiency of resource use, promote social equality, and maintain economic stability and growth.

Under the condition of mixed economy, the research object of western economics is how individuals, manufacturers, governments and other economic organizations make choices under the given economic system, and how these choices determine the use of social resources.

Economics of scarcity of resources

1.Microeconomics

Implications of microeconomics Microeconomics explains the operation and role of market mechanisms in modern economies and the ways to improve such operations through the study of the economic behavior of individual economic entities. Its central theory is the "invisible hand" price mechanism.

Main contents of microeconomics research

The first level analyzes how a single consumer makes optimal production decisions to achieve maximum utility, and how a single producer makes maximum profits with optimal economic decisions.

The second level analyzes the price and output decisions of a single market. This is the result of the joint action of consumers and producers (both demand and supply) in the pursuit of their own economic benefits.

The third level analyzes the price and output decisions of all individual markets, which in turn depends on the joint role of all individual markets (such as product markets, labor markets, and capital markets).

2. Macroeconomics

The meaning of macroeconomics Macroeconomics takes the overall behavior of the entire economy as the research object, and examines the overall market performance to show how the total resources of the society are determined.

The main content of macroeconomic research is how consumers and manufacturers choose to determine the amount of consumption and investment, and thus the aggregate demand.

How consumers and manufacturers choose supplies and inputs to determine the total supply of the entire economy.

How aggregate demand and aggregate supply in the economy determine total resources and prices.

Long-term trends in total resource and price levels.

3. The connection between microeconomics and macroeconomics

First, microeconomics and macroeconomics are complementary. Second, microeconomics is the foundation of macroeconomics. Again, macroeconomics is not a simple summation or repetition of microeconomics. Finally, the two together constitute the Western economy Learning as a whole.