Impact Of Scarcity In Economics

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Social Science and Economics Scarcity affects the choices made by governments and individuals Scarcity in governments can be categorized into two groups; limited resources and unlimited wants or needs. Unlimited wants and needs is part of the basic human existence. It means that people are never satisfied with what they have .Unlimited wants is one of the problems that affect human beings while the other problem is limited needs. These two factors have been considered as a motivating factor in improving the livelihoods of individuals. They also affect the choices that are made by governments and individuals. Despite the numerous needs and wants, governments usually have limited choices as they have to make decisions based on the basic human…show more content…
A market is a place where goods are exchanged. There are two major laws that are used in trade, the law of supply and the law of demand. A market comprises of producers and consumers who affect the prices of goods and services. Markets affect the process of production, distribution and consumption in the following ways: When the markets fetch a high price for a certain type of product, then its rate of production will increase. This gives a relationship between supply and quantity. The high prices will also encourage more resources to be used in the process of production which translates to high production profits. High prices of goods in the market may discourage its consumption. Hence more consumers will tend to avoid purchasing the product affecting its demand and eventually affecting its production. The prices of goods in the market also affect distribution. In essence, the distribution of products and goods depend on the principle of willing buyer and willing sellers. The consumers of the product will determine the worth of the product with regard to its price and decide whether they will purchase it.Eventually, the prices will determine whether they purchase the good hence also determine its…show more content…
In the U.S individual can be divided into the upper class, middle class and lower class. The main difference within these groups is the lifestyle and economic capacities. Marketers also modify their products in terms of quality, price and marketing strategy to fit the social status of their target consumers. Psychological factors; Psychological factors are determined by the perceptions, beliefs, motivation and the attitudes of a consumer. The marketers target to improve the attitude of consumers towards their products or modify the products to meet the consumer’s perceptions and values. Individual factors; these are factors that are based on personality, gender disparities, age and self-perceptions. Marketers also modify their products to meet the individual needs of the society to increase consumption of their products in the market. Economic interdependence between

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