Chapter 6 Concept of Scarcity Learning Journal

Name: Romeo Bordallo Jr.

Subject: Microeconomic Analysis
Professor: Maria Corazon E. Mercado, DBA.

Why is scarcity important? This one question is always asked when we study about
scarcity in economics. Well, because is one of the significant factors that influence supply and
demand. From what I have learned so far from our discussion that human beings have
unlimited wants and we only have limited resources.
Based on my understanding on the report scarce goods are typically subject to greater
demand, they often command higher prices as well. This part of the reason why high-end
cellphones and designer clothing are more expensive than their abundant counterparts.
It was also discussed some effects of scarcity like what happened in Leyte particularly in
Tacloban during the tragedy of the super typhoon Yolanda that struck the city the hardest.
Scarcity of the necessities like food and water resulted to chaos and problems. The scarcity of
resources may lead to widespread problems such as famine, drought and even war. These
problems occur when essential goods become scarce due to several factors, including
exploitation of natural resources or poor planning by government economist. Philippines is one
of the most disaster-prone countries in the world. According to the U.N’s 2017-world risk index
Philippines is at the third most at risk of natural disasters among 171 countries. As an
economist, entrepreneur or in the government we should learn how to manage our scarce
resources, so when tragedy happens we can prevent or lessen scarcity issues mentioned above.
In addition in my understanding about the impact of scarcity on economic integration.
What is economic integration? By definition, it is an arrangement among nations that typically
includes the reduction or elimination of trade barriers and coordination of monetary and fiscal
policies. I believe this is what we called “Free Trade Agreement (FTA) where countries have a
pact to reduce barriers to import and exports among them. Under a free trade policy, goods
and services can be bought and sold across international borders with little or no government
tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. If there is scarcity of goods
among nations then it will have a big effect on the FTA agreement since everyone will compete
at each other to have the most resources.
Finally, I've learned that scarcity plays an important role in our society; it can either
benefit us or cause us problems, so as economics students, we should learn about and analyze
the effects and impacts of scarcity in our community and country so that we can be prepared
for and find solutions to the problems that arise as a result of scarcity.