Wednesday, April 1, 2015

Does the fact that something is abundant mean it is not scarce in the economic sense? Why or why not?

In an economic sense, if something is abundant, then it still might be scarce. Scarcity means that some resource is limited. Abundance means that there is plenty of a resource. There are several examples of a resource that might be abundant but, in reality, is really a scarce resource. One example is water. In some areas of the world, there is an ample supply of water. People who live near the Great Lakes, for example, have a good supply of water. However, if a person lives in a dry climate, such a desert, water would be a scarce resource. The same would be true if the water supply was abundant, but the water was polluted and unusable.
Another example would be oil. In some parts of the world, there is plenty of oil that is easy to extract and refine. As a result, the cost of getting this oil is affordable and profitable. In other parts of the world, the oil is so deep in the earth, that it is too costly to get the oil from the earth. While there may be a good supply of oil available, it is not extracted from the earth because the cost is too high to do so. There also is a limited supply of oil, even in places where it is easy to extract and refine.
A third example is the resource of time. Every person has 24 hours in a day or 1440 minutes each day. That may seem like a lot of time, but if a person has too many activities planned during that 24-hour period, there might not be enough time to accomplish everything. This person might have to make choices about how to use the time available that day. On the other hand, a person who has very little to do might feel like there is an abundance of time in a day.
There are various factors that impact if a resource, which may appear to be abundant, is really an abundant resource.

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