Question

How does scarcity determine the economic value of an item by the amount of goods that are produced?

Answer 1

Hello there! Scarcity determines the economic value of an item by the quantity of goods produced at the time. Let’s start by defining scarcity in economy:

Scarcity refers to the depletion, minimization, or absence of a public resource. Another way to remember this term is to think about a black footer ferret; it is an endangered species, meaning there is not much left of it. Scarcity has the same context as this but with different materials, primarily food.

Scarcity often causes the economic value of an item to raise because of its rarity. When there is less of a resource, the ideal solution for sellers of that resource is always going to be to raise the value. Money is always considered in cases like this. As the value of said item increases, less of it is made. Because less is made, there is a gradual depletion in supply of it. If you need any help, let me know and I will gladly assist you.