Lesson 2

The Concept of
Scarcity
Prepared by: Rebecca Rabe-Galano
Subject Teacher
The Role of Scarcity in Our Life
Scarcity

Central Forces people

problem in Resources to make
Economics Are choices
limited
TWO CONFLICTING CONDITIONS

NEEDS RESOURCES WANTS

(unlimited) (limited) (unlimited)
 SCARCITY VS. SHORTAGE

SCARCITY SHORTAGE
• A UNIVERSAL CONDITION • CAUSED BY NEGATIVE BUSINESS
• REASON WHY WE NEED TO STRATEGY
OPTIMIZE AND MAXIMIZE THE • ARTIFICIAL SHORTAGE
USE OF RESOURCES • HOARDING
• PERMANENT • CARTEL
• TEMPORARY
BASIC ECONOMIC PROBLEMS

SURVIVAL
(GOALS OF THE PEOPLE AND SOCIETY)

SCARCITY

GOVERNMENT
 BASIC ECONOMIC PROBLEMS
PRODUCTION PROBLEM DISTRIBUTION PROBLEM

• WHAT TO PRODUCE? • FOR WHOM ARE THE GOODS TO BE

• HOW TO PRODUCE? PRODUCED?
• HOW MUCH TO PRODUCE? • HOW TO DISTRIBUTE THE GOODS?
 BASIC ECONOMIC PROBLEMS
PRODUCTION PROBLEM

1. WHAT TO PRODUCE?
2. HOW TO PRODUCE?
-LABOR INTENSIVE TECHNIQUE
-CAPITAL INTENSIVE TECHNIQUE
3. HOW MUCH TO PRODUCE?
 BASIC ECONOMIC PROBLEMS
DISTRIBUTION PROBLEMS

1. FOR WHOM ARE THE GOODS TO BE PRODUCED?

2. HOW TO DISTRIBUTE THE GOODS?
 BASIC ECONOMIC PROBLEMS

The government is doing everything to answer

the different questions related to production and
distribution of goods for the achievement of the
national goals of our economy, which is to
provide the basic needs of the people.
 ALLOCATING THE RESOURCES
Allocation- the mechanism that deals with the
distribution of natural resources, human resources, and
physical resources to diverse uses in order to answer
the problem of scarcity.

Market- one of the important mechanism of allocation

because it shows how the resources are being used in
production.
 ALLOCATING THE RESOURCES
Expansion- one way in distributing the resources.

Main important steps to make resources expand.

1. effective, orderly, and wise use - Conservation
2. Investment – additional capital
3. Use of modern technology