Question

How are environmental issues related to scarcity and opportunity cost

Answer 1

Environmental issues such as global warming, pollution, improper garbage disposal, and the like, will create an impact to the availability of resources in the world. One example is when someone from the wood furniture industry chooses to close down and gears towards opening a metal furniture company since wood is scarce due to illegal logging. This would affect not only the businessman, who could have managed to run both businesses but chose to close down due to scarcity, but also affect the workers who could have learned both fields of wood-working and metal works. Opportunity A was sacrificed over Opportunity B.

Answer 2

Scarcity is a global economic problem, in the sense that there is a desire or need in all people to acquire more goods and services than is available, and that this is a very general problem.

The economic problem arises because the needs are virtually unlimited, while the resources to satisfy them are limited and therefore also the economic goods are scarce.

Scarcity is applicable to those things that are useful, that is, those that are most needed, for example food, hygiene items, clothing, housing, electricity, water, gas, etc.

Our decisions have consequences, in economic matters they are know as opportunity costs. The opportunity cost implies that, when choosing one thing, you will neccessarily renounce the benefits offered by another.

Everyone, regardless of the socioeconomic level, we face daily this condition. Families decide how to take advantage of our resources for our household expenses, companies choose how to invest for the improvement of their production processes, etc.

Population growth, economic growth and the need to improve the quality of life are putting additional pressure on the weakened inventories of natural resources and environmental amenities. The existing pressure on these resources will accelerate the degrading processes.

Establishing a nexus between scarcity and the price of a resource is extremely critical to look for new options that improve the management of natural resources and direct us to sustainable development. All environmental issues revolve around the relationship between the finitude of environmental resources and the use made in the use of these resources, generating large economic and social imbalances, which call into question the very survival of human societies.