Economic Problems In Scarcity

Scarcity raises an essential question upon societies: What, how and for whom goods should be produced given society’s available resources? Societies respond to this question by arraying themselves into basic economic systems, with different interpretations and solutions to what became known as the economic problem. Economic systems therefore highlight the economic structure of a society, from production to allocation of resources and consumption, evaluating all aspects of the economic problem.

Economists acknowledge four types of economic systems: traditional, command, market and mixed economies. A traditional economy or a barter economy is an economy in which the beliefs and the traditions of a certain community determine what goods are produced and their allocation throughout the economy. Traditional economies are usually found in farm-based, or fishing/hunting-based countries, in which people work together and exchange, or in other cases, share the earnings of their labor equally. Besides, little surplus is produced in such economies, and barter, the exchange of goods, is used instead of money. These economies are often regarded “primitive” and inefficient, which is why most of them remain in the past. They existed among secluded tribes in Northern Canada known as the Inuit and some Australian aborigines. The Inuit for instance relied on the Artic resources for 4,000 years to live, hunting, gathering and assembling everything they needed themselves from igloos to