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Problems of Scarcity

Problems of Scarcity

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Published by ClassOf1.com
Millions of people suffer from economic privation. Some countries have ample natural resources but lack sufficient capital to develop an adequate transportation system and a strong industrial base. The problem is exacerbated when these countries have large populations. For example, China, with over 1.3 billion people, has ample natural resources, but lacks sufficient capital for a nation its size. China has experienced a dramatic increase in total production in recent years due to a shift toward a more market-oriented economy.
Millions of people suffer from economic privation. Some countries have ample natural resources but lack sufficient capital to develop an adequate transportation system and a strong industrial base. The problem is exacerbated when these countries have large populations. For example, China, with over 1.3 billion people, has ample natural resources, but lacks sufficient capital for a nation its size. China has experienced a dramatic increase in total production in recent years due to a shift toward a more market-oriented economy.

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Published by: ClassOf1.com on Jun 12, 2013
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04/05/2014

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Economics
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Sub: Economics Topic: Scope of problems
*
The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not forsubmitting the same in lieu of their academic submissions for grades.
Problems of Scarcity
 
Millions of people suffer from economic privation. Some countries have ample natural resources butlack sufficient capital to develop an adequate transportation system and a strong industrial base. Theproblem is exacerbated when these countries have large populations
. For example
, China, with over1.3 billion people, has ample natural resources, but lacks sufficient capital for a nation its size. Chinahas experienced a dramatic increase in total production in recent years due to a shift toward a moremarket-oriented economy. However, the annual income or output of the average Chinese citizen isvery low, for what is produced must be shared by an exceptionally large number of people. India is ina similar situation, with a population of over 1 billion people, but with only moderate resources and achronic shortage to capital. Some areas are short of capital and technology, others lack naturalresources, and some have a shortage of skilled labor. Japan must allocate resources very wisely toproduce enough to support 127 million people from the output of a land area that is about the, size of Montana. Imagine what would happen if we were to crowd about 43 percent of the people of theUnited States into the state of Montana and tell them to feed and clothe themselves from theresources of that area alone.Frequently, when a country finds itself lacking the labor and/or land necessary for a high level of output, it can overcome the deficiency with an increase in human capital. Japan,
for example
, hasoffset its lack of natural resources with an exceptionally high degree of industrial efficiency. Thispermits Japan to import raw materials, process them into finished goods, and sell them in domesticand foreign markets at a profit. A shortage of resources or labor may be overcome by the discovery' of new resources, the development of new and better techniques, and the use of better machinery' toproduce greater yields from existing resources. There are thousands of examples of ways in whichproductivity has been increased. Using synthetic fibers in place of natural fibers, plastics in place of metals, computers as a substitute for human labor, and lasers in place of old-fashioned surgical tools
 
 
Sub: Economics Topic: Scope of problems
*
The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not forsubmitting the same in lieu of their academic submissions for grades.
has increased productivity. In the future, we will see more extensive use of geothermal and solarenergy, commercial processing of seawater to extract valuable minerals, and new and bettermachines to do things we now consider highly improbable. All such developments will case theproblem of scarcity by obtaining mote output from existing resources. Many nations, however, do nothave the natural resources, skilled labor force, or capital to improve their standard of living.Furthermore, many of these developing nations produce at subsistence level and are unable to forgocurrent consumption in order to invest in additional capital.

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