Scarcity and Tradeoff in Daily Life (Essay Sample)

Scarcity and Tradeoff in Daily Life
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Scarcity is the situation of not being able to have goods and services an individual wants. Scarcity exists because human needs for goods and services exceed the amount of goods and services that can be produced using the resources available. Finances are an example of a scarce resource that plays a role in our daily life and decision making. For instance, people with limited finances are seen to make decisions that are not effective (Kapp, Berger & Steppacher, 2011). Such cases occur when it comes to taking their medication at the correct time and managing finances. However, people not only make bad decisions because they are poor but because scarcity is distracting and takes people’s minds away from other factors. Examples of opportunities foregone due to limited resources include good immunity.
In economics, Trade-off refers to the exchange of one resource for another resource of more or less equal worth, especially to effect a negotiation. According to Kapp, Berger & Steppacher, (2011) resources available for production may be in a limited amount. Therefore, it is upon the firm to plan in effectively to know which tradeoff of resources will be effective. An example of a trade-off in a firm can be using capital intensive technology rather than hiring more employees. The dominant factors of production what is used in the production process to produce output. Factors of production include land, capital, labor and entrepreneurship.
When making choices as an individual, there are factors that influence economic decision making. Those factors include Constraints of a budget influence nearly all economic decisions, desire to maximize benefits while minimizing costs, and rational decision making (Silvia, 2011). There are many factors that an individual considers in decisions in terms of consumption. Those factors include: Prices of the resources and availability of such resources.
In our society, either of the cons...