Question:

What is the link between scarcity and choice in economics?

Answer:

Opportunity cost means that one must make choices due to scarcity, and the cost of that choice means giving up something else. AnswerParty On!

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economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία (oikonomia, "management of a household, administration") from οἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the house(hold)". Political economy was the earlier name for the subject, but economists in the late 19th century suggested "economics" as a shorter term for "economic science" that also avoided a narrow political-interest connotation and as similar in form to "mathematics", "ethics", and so forth.

A focus of the subject is how economic agents behave or interact and how economies work. Consistent with this, a primary textbook distinction is between microeconomics and macroeconomics. Microeconomics examines the behavior of basic elements in the economy, including individual agents (such as households and firms or as buyers and sellers) and markets, and their interactions. Macroeconomics analyzes the entire economy and issues affecting it, including unemployment, inflation, economic growth, and monetary and fiscal policy.

Scarcity Microeconomics

Value theory encompasses a range of approaches to understanding how, why and to what degree people value things; whether the thing is a person, idea, object, or anything else. This investigation began in ancient philosophy, where it is called axiology or ethics. Early philosophical investigations sought to understand good and evil and the concept of "the good". Today much of value theory is scientifically empirical, recording what people do value and attempting to understand why they value it in the context of psychology, sociology, and economics.

At the general level, there is a difference between moral and natural goods. Moral goods are those that have to do with the conduct of persons, usually leading to praise or blame. Natural goods, on the other hand, have to do with objects, not persons. For example, the statement "Mary is a good person" represents a very different sense of the word 'good' than the statement "That was some good food".

In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone, in a situation in which a choice needs to be made between several mutually exclusive alternatives given limited resources. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would be had by taking the second best choice available. The New Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one alternative is chosen". Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice". The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently. Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered opportunity costs.

Choice

Post-scarcity is a hypothetical form of economy or society in which goods, services and information are universally accessible on condition of fulfilling one's social obligation to maintain the economy. This would require a sophisticated system of resource recycling, in conjunction with technologically advanced automated systems capable of converting raw materials into finished goods.

Economic anthropology is a scholarly field that attempts to explain human economic behavior in its widest historic, geographic and cultural scope. It is practiced by anthropologists and has a complex relationship with the discipline of economics, of which it is highly critical. Its origins as a sub-field of anthropology begin with the Polish-British founder of anthropology, Bronislaw Malinowski, and his French compatriot, Marcel Mauss, on the nature of gift-giving exchange (or reciprocity) as an alternative to market exchange. Studies in Economic Anthropology for the most part are focused on exchange. The school of thought derived from Marx and known as Political Economy focuses on production, in contrast, and is covered in a separate article. The large body of work on the Anthropology of development is also dealt with in a separate article.

Post-World War II, Economic Anthropology was highly influenced by the work of economic historian Karl Polanyi. Polanyi drew on anthropological studies to argue that true market exchange was limited to a restricted number of western, industrial societies. Applying formal economic theory (Formalism) to non-industrial societies was mistaken, he argued. In non-industrial societies, exchange was "embedded" in such non-market institutions as kinship, religion, and politics (an idea he borrowed from Mauss). He labelled this approach Substantivism. The Formalist vs Substantivist debate was highly influential and defined an era.

Finance is the allocation of assets and liabilities over time under conditions of certainty and uncertainty. A key point in finance is the time value of money, which states that a unit of currency today is worth more than the same unit of currency tomorrow. Finance aims to price assets based on their risk level, and expected rate of return. Finance can be broken into three different sub categories: public finance, corporate finance and personal finance.

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