Scarcity

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Scarcity발음듣기

[Instructor] The entire field of economics is based on the idea of scarcity.발음듣기

And, arguably, we wouldn't even need a field of economics, if there wasn't the notion of scarcity in the world.발음듣기

So what does scarcity mean?발음듣기

Well, think about what does it mean in everyday life?발음듣기

It means that there's not enough of something to go around.발음듣기

If we're talking about scarce goods scarce services, scarce resources we're talking about things where if there was no cost associated with them, people would use far more of that than there actually is around.발음듣기

And in this video we're gonna think about different types of goods and services or just resources and think about whether they are scarce or not.발음듣기

So a related idea to scarce resources is it's opposite which is the notion of a free resource.발음듣기

So this is something that, you could argue is infinitely abundant or at least in a certain context is so abundant that it feels like people can have as much of it as they want.발음듣기

The more that one person has of it doesn't take away from someone else.발음듣기

And the reason why scarcity is essential to economics is because economics is the study of how do you allocate these scarce resources.발음듣기

If there's more demand for it than the amount of thing that there is well, who gets it, how much of it do they get and what do they have to give up in exchange to get those scarce resources?발음듣기

But for the sake of this video let's just first make sure we understand and have a good idea of what resources are scarce and which ones aren't, and why.발음듣기

So this is a picture of caviar which is essentially fish eggs and it's not easy to get.발음듣기

The fish eggs are deep in the water someone has to get to them, and then they have to package it in some way and they have to get it to your plate.발음듣기

And so, do you think that caviar is a scarce resource or a free resource?발음듣기

Well, if it was a free resource, that means that we're just swimming in caviar that it's so abundant that I could just have as much caviar as I want and there's still as much as you want and that everyone gets as much caviar as they like.발음듣기

Well, that's clearly not the case.발음듣기

Caviar is a scarce resource.발음듣기

In fact it is a quite scarce resource and because of that, if you want it you have to give up a good bit to get it.발음듣기

This is a picture of some people working in a factory and the resource that jumps out here is that of labor.발음듣기

And labor's interesting because it's not as tangible as something like caviar but it is a resource.발음듣기

And one could even argue that caviar on your plate some of its scarcity comes from the labor involved of getting it to your plate.발음듣기

But here these are clearly, it looks like these are gentlemen who are putting together some type of fabric.발음듣기

And so, would you consider labor would you consider that a scarce resource or a free resource?발음듣기

Well, it would be a free resource if people were willing to just do as much work for other people actually willing to do an infinite amount of work for other people, which isn't even humanly possible.발음듣기

And even is it was humanly possible people aren't willing to do that.발음듣기

They want something in return.발음듣기

And so, once again, it is a scarce resource.발음듣기

There's many resources that are pictured right here.발음듣기

You have this beautiful town next to this alpine lake.발음듣기

And so, some clear scarce resources are here.발음듣기

Many people would love to have a view like you would get from this house or hotel right over here, but not everyone and many people would love to live there because of the view, but not everyone can live there.발음듣기

So that is a scarce resource.발음듣기

The water here is an interesting one.발음듣기

I can imagine in earlier times if before there was a town here if there was just a primitive village living next to this fresh water they would probably view it as a free resource.발음듣기

If someone was thirsty, they would just go up to the lake and they would just drink from the lake.발음듣기

They would not have to give up anything to drink from that.발음듣기

But now the town, it might be a little bit more of a scarce resource.발음듣기

They might want to preserve it for various reasons.발음듣기

In order to get the water to your sink in your house, there might be some services or goods or labor involved.발음듣기

Someone has to set up the pipes maybe it has to be cleaned in some way.발음듣기

Well, then it might become a little bit more of a scarce resource.발음듣기

Air for most of human history has been considered a free resource.발음듣기

And even today I'd argue that something like oxygen, at least on our planet is considered a free resource.발음듣기

When I take a deep breath (breathes deeply) it does not affect your ability to take a deep breath.발음듣기

It does not take oxygen away from you.발음듣기

Now is there an infinite amount of oxygen in our atmosphere?발음듣기

No. But for our purposes it feels like there's an infinite amount.발음듣기

Now if the photosynthetic plants were to disappear and all of a sudden oxygen started to get diminished.발음듣기

Or if we were in a space station where there isn't a seemingly infinite amount of oxygen well then you could imagine a world where it could become a scarce resource.발음듣기

You can imagine a colony on the Moon or on Mars or in the space station where it had some type of economic system to decide who gets how much oxygen.발음듣기

So I will leave you there.발음듣기

As already mentioned, scarcity is the central idea in all of economics.발음듣기

It's the reason why we even need a field called economics.발음듣기

And as you go forward in your study of both micro and macroeconomics, we'll be looking at ways to allocate these scarce resources.발음듣기

We'll try to study what people have to give up in order to have access to these resources and we will have models that will help us understand what are the implications for these different methods of allocating resources.발음듣기

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