Share
Explore BrainMass

Scarcity/Supply/Demand/Equilibrium

Could you identify and describe the concepts of scarcity and opportunity costs. Also, explain the laws of supply and demand and how they are related to the concepts of scarcity and opportunity costs in decision-making. Finally give me something other then a text book definition on market equilibrium and explain how it is determined.

Solution Preview

Scarcity/supply/demand/equilibrium

Could you identify and describe the concepts of scarcity and opportunity costs. Also, explain the laws of supply and demand and how they are related to the concepts of scarcity and opportunity costs in decision-making. Finally give me something other then a text book definition on market equilibrium and explain how it is determined.

In economics scarcity means that the wants and requirements of human beings are greater than the capacity to produce goods to satisfy these wants. From a broader perspective scarcity refers to a situation in which the objectives of the society cannot be fulfilled in their entirety. What happens is that there is a need to trade off the production of one goods against another. In economics a resource is said to be scarce when the available resource cannot fulfill the demand. Thus there is scarcity because there is a limited supply of resources.

Opportunity cost on the other hand means the amount of goods and services that must be given up to get something. The opportunity cost of some decision is the value of the next best choice that must be ...

Solution Summary

This explanation provides you a comprehensive argument relating to Scarcity/Supply/Demand/Equilibrium

$2.19