Example research essay topic: Goods And Services Prentice Hall - 2,068 words

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Scarcely Noticeable. Topic - "How does the scarcity of a resource, such as oil or computer technology affect daily life?" Table of Contents, Essay Page Introduction 2 Body: 2 Part I 2 Part II 4 Part III 5 Conclusion: 7 Bibliography 8 Introduction Scarcity is the basically when the demand for something surpasses the supply of something. In other words, if everybody wants gold, but its supply is limited and less than the demand, it is scarce. Sand for instance is also something people want and use in daily life, yet is supply is greater than the demand, therefore sand is abundant not scarce. In the following essay I am going to speak about the scarcity with respect to everyday life. I will present various educated findings together with my personal opinion on the given matter.

Body: Part 1 Scarcity forces us to make choices. Choices entail an alternative foregone or given up -- the opportunity cost. Economists assume that human beings make choices in a rational manner, that is, they weigh the marginal costs and marginal benefits of that alternative. Economics focuses on the analysis of this decision-making process. It helps us understand how people behave (make choices and various decisions) in the context of scarcity (Hueting, 117). Scarcity is the most fundamental problem in economics.

Scarcity exists because human wants and needs exceed the quantity of goods and services that can be produced using all available resources. Economists are fond of saying that "there is no free lunch, " which means that, even if something is "free" to us, there is a cost to society in terms of the alternative foregone. For example, if a city uses land to build a football stadium, the best alternative for that land is given up. If additional funds are spent for police patrols, less money is available to hire more teachers (Hazlitt, 34). The reality is that cannot have everything that we want. So, faced with scarcity, individuals, government and society in general must make choices.

Students make choices every day. Is watching TV the best use of your scarce time? Is working at a fast-food restaurant better than the best alternative job or some other use of your time like studying French or playing chess? Therefore, when there is a need for food (scarcity) you are always welcome to either start growing your own food in the backyard or trade your activity (work) for the food and other things you find scarce (Hueting, 119). Whenever a choice is made, something certainly must be given up.

The opportunity cost of a choice is the best alternative given up. Choices involve trading off the expected value of one opportunity against the expected value of its best alternative. The evaluation of choices and opportunity costs is subjective; such evaluations differ across individuals and societies. It should be noted that the concept of efficient possibilities frontier is based on scarcity and the opportunity cost. It states that with limited resources like labor or capital (most common factors used for this model), a country can do a limited number of tasks.

In other words, it can dedicate all its labor and capital to producing automobiles but then, it would be forced to buy everything else from other countries (Seplaki, 86). If the country decides also to produce food, it will direct at least some people and capital to farming which in turn will result in the declined output for cars. As priorities grow, more and more choices start to be made and at some point of time it becomes apparent that the cars that the country started to produce in the first place may now become scarce because not much effort is directed to cars any longer, but the scarcity of other resources declined. Therefore, the only wise thing a person or a country can do in times of scarcity is a proper choice: whether to produce it on ones own, or to trade it (Hazlitt, 36). Later we will learn that sometimes the countries prefer to steal it or take it away by means of war. Part II: To make efficient decisions - decisions that provide the greatest possible return from the resources available -, people and society must weigh the benefits and costs of using their resources to do more of some things, and less of others.

For example, to use their time effectively, students must weigh the additional benefits and costs of studying economics rather than listening to music or socializing with friends, or sleeping. School officials must decide whether to use some of its funds to buy more library books, more football helmets for the team, or more classroom equipment for teachers. Company managers must choose which products to make and whether to increase or decrease their output. It should also be noted that the government officials must decide which spending programs to increase and which to decrease (Hueting, 121). Our archaeologists claim that war originated when the cities had to protect their food surpluses from the remaining nomads. There had been organized violence, but armies, generals, killing LARGE numbers of people came with the food surpluses (Hazlitt, 39).

The people would fight for scarce land, territory, or resources. Currently, we see a very aggressive US position in Iraq, and although there is certainly a need to oust the hostile terrorist regime out of the country, the apparent US control over virtually all oil fields and the extraction of the Iraqi oil for the US consumption states that the scarcity in the USA caused this country to make such strategic choice. Instead of spending billions for the oil extraction technology that would result only in the actual oil, the war in Iraq accomplishes several purposes: it will remove the terrorist regime from the face of the earth, it will provide the USA with cheap oil, it will improve the financial health of the US companies (aircraft, military ammo, etc. ) and it will improve the US security by training soldiers to fight and by scaring the world with the US force. The scarcity of oil in the country in this case contributed to the wise decision of initiating a war that besides oil would bring other positive things to the USA instead of either trading oil or extracting oil on ones own.

Therefore we agree that scarcity plays a role, but there are different kinds of scarcity. I suffer from a scarcity of Ferraris, however I am not motivated to go to war to get one. On the other hand, if I have no food, or I am cold and have no fuel for heat... which direction do we march... Many countries, like china and Russia are notorious for the software and technology piracy. Such decision of theirs is certainly justified: the countries in order to keep up with the modern world are in need of modern technology, yet it is scarce.

The countries can spend money on acquiring that technology, but in that case they would face scarcity in some other areas from which the funding was taken. As a result, they chose the unethical / illegal mean of dealing with scarcity (Seplaki, 89). Therefore, here I believe it should be noted that in order to fight scarcity in the long run there must be exist free trade. Trade Can Make Everyone Better Off in scarce times.

Consider trade that takes place inside your home. Certainly the family is involved in trade with other families on a daily basis. Most families do not build their own homes, make their own clothes, or grow their own food. Just like families benefit from trading with one another so do countries. This occurs because it allows for specialization in areas that countries (or families) can do best.

Part III The following facts are true of scarcity: People economize, that is, they choose the alternative which seems best to them (involves the least cost and the greatest benefit. ) All choices involve cost. The opportunity cost is the second best choice people give up when they make their first (best) choice (Hazlitt, 41). The consequences of choice lie in the future. Economics stresses making decisions about the future -- what happens next -- because we cannot influence what happened in the past (Hueting, 123). Because of scarce resources and unlimited wants, decisions must be made about what goods and services we should produce, how to produce them, and for whom. These are the three fundamental economic questions every economic system must answer (Seplaki, 92).

Here we must pause for an unexciting but crucial issue, yet another definition of scarcity. Ask yourself: If copper - or oil or any other good - were much scarcer today than it actually is, what would be the evidence of this scarcity? That is, what are the signs - the criteria - of a raw material being in short supply (Barnett, 28). Upon reflection perhaps you will not expect a complete absence of the material as a sign of scarcity.

We will not reach up to the shelf and suddenly find that it is completely bare. The scarcity of any raw material would only gradually increase. Long before the shelf would be bare, individuals and firms - the latter operating purely out of the self-interested drive to make profits - would be stockpiling supplies for future resale so that the shelf would never be completely bare (Seplaki, 94). Of course the price of the hoarded material would be high, but there still would be some quantities to be found at some price, just as there always has been some small amount of food for sale even in the midst of the very worst famines (Hueting, 128). The preceding observation points to a key sign of what we generally mean by increasing scarcity: a price that has persistently risen.

More generally speaking, cost and price - whatever we mean by price, and shortly we shall see that that term is often subject to question - will be our basic measures of scarcity (Coombs, 45). Therefore, scarcity is not something that does not exist physically, but something as of little supply as determined by the market demand. In some situations, though, prices can mislead us. Governments may prevent the price of a scarce material from rising high enough to clear the market - that is, to discourage enough buyers so that supply and demand come to be equal, as they ultimately will be in a free market.

If so, there may be waiting lines or rationing, and these may also be taken as signs of scarcity. Conclusion-summarize and suggest further study. In conclusion I would like to note that people face tradeoffs and there is no such thing as a free lunch. Making decisions requires trading off one goal (or good) for another. Examples include how a student spends her time, how a family decides to spend its income, how the U. S.

government spends tax dollars, how regulations may protect the environment at a cost to firm owners. A special example of a tradeoff is the tradeoff between efficiency and equity. One must remember that efficiency: the property of society getting the most it can from its scarce resources. Equity on the other hand is the property of distributing economic prosperity fairly among the members of society. For example, tax dollars paid by wealthy Americans and then distributed to those less fortunate may improve equity but lower the return to hard work and therefore reduce the level of output produced by our resources. This implies that the cost of this increased equity is a reduction in the efficient use of our resources.

The countries and people use the opportunity cost principle to guide their decisions about how to deal with scarcity. The wars, piracy, cheating, bribery, or price increases are just a few ways of dealing with limited resources. Bibliography: Hazlitt, Henry, Economics in One Lesson, McGraw Hill, 2001. Hueting, R, New scarcity and economic growth: more welfare through less production? , Penguin books, 2000. Seplaki, Les, Economic Scarcity and Healthcare Quality: Tradeoffs in Delineations and Dilemmas, Prentice Hall, 2001.

Barnett, Harold, Scarcity and Growth the Economics of Natural Resource Availability, Penguin books, 2000. Coombs, Herbert, The Return of Scarcity: Strategies for an Economic Future, Prentice Hall, 1999. Banks, Ferdinand, Scarcity, energy, and economic progress, Oxford university Press, 2002.

Research essay sample on Goods And Services Prentice Hall