Economics: Limited Resources and Growing Human Needs

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Table of Contents

Restrictive Factor
Common Ways of Solving the Basic Economic Problem
Conclusion
References

The branch of economics, like any other sphere of life, has certain difficulties in functioning and realization. Sometimes people who are directly related to this sphere face problems that are difficult to solve. Based on the experience of conducted studies, it can be concluded that one of the basic problems of the modern economy is substantial limited resources that exist in conditions of unlimited human needs. Therefore, this issue is so often discussed and is one of the key dilemmas in the modern economy.

Restrictive Factor

Needs are the central motive for the development of the country’s economics. This factor is diverse and complex enough and deserves thorough research. According to Dopfer and Potts (2015), people have to meet physical needs and spiritual knowledge, communication, travel, etc. Enterprises need equipment and labor to produce goods and services. At the same time, one object can satisfy different needs. As the society develops, needs are growing, their structure and quality are changing, new possibilities arise and old ones are being forgotten. The population is growing, which inevitably requires an increase in the mass of created material and spiritual goods. Needs have no boundaries, and resources are always limited, that is, the society has a certain amount of land, labor, and capital at its disposal (Leigh & Blakely, 2016). There is always a contradiction between boundless needs and the limited possibilities of their satisfaction.

Limitations extend even to information, consumers, and money held by them. Every person and the society as a whole face a certain choice. As Veselovsky, Gnezdova, Romanova, Kirova, and Idilov (2015) note, as resources are limited, the possibility of increasing one good is achieved by reducing the production of another. An individual, an enterprise or the society has to sacrifice something, that is, to pay a certain price for the choice made. This contradiction is resolved at each specific stage by an increase in production volumes.

Common Ways of Solving the Basic Economic Problem

The problem of choice, as a rule, is infinite. It means that people are not limited to any one decision but have quite a number of options to make a particular choice. First of all, this choice is made among the economic options of resource use, that is, the best correlation of the result and costs is taken into account. After all, each resource can be applied to meet different needs, and the technology of its use can also be diverse. To find the best option for using resources is the meaning of choice as an economic problem.

An optimal economic solution is the one that provides the maximum result at the minimum of costs. In the sphere of economy, there are only three subjects: consumers, producers, and the society. Therefore, it is accepted that the optimum economic result for consumers is the growth in the quantity and quality of satisfied needs (Leigh & Blakely, 2016). For sellers, it is profit increase, and for the government, it is the degree of satisfaction of public needs (environmental protection, support for the disabled, unemployment benefits, etc.). Therefore, different methods to satisfy needs are used among three subjects.

Conclusion

Thus, one of the fundamental problems of the modern economics is substantial limited resources in conditions of unlimited human needs. Specific limitations relate to almost all the spheres of people’s lives. To solve this issue, the division of economics into three subjects should be taken into account. An optimal economic solution is the provision of the maximum result at the minimum of costs.

References

Dopfer, K., & Potts, J. (2015). The general theory of economic evolution. New York, NY: Routledge.

Leigh, N. G., & Blakely, E. J. (2016). Planning local economic development: Theory and practice (6th ed.). Thousand Oaks, CA: Sage Publications.

Veselovsky, M. Y., Gnezdova, J. V., Romanova, J. A., Kirova, I. V., & Idilov, I. I. (2015). The strategy of a region development under the conditions of new actual economic. Mediterranean Journal of Social Sciences, 6(5), 310-317.

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Economics: Limited Resources and Growing Human Needs

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