Yousf
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The following questions:
How can specialization be used to address the problem of scarcity?
Role of market in allocating scare resources?

Thanks, i don't want just an answer, but an explanation of the answer to help me understand
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Shahh112
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(Original post by Yousf)
The following questions:
How can specialization be used to address the problem of scarcity?
Role of market in allocating scare resources?

Thanks, i don't want just an answer, but an explanation of the answer to help me understand
Been a while since I did any economics but I'll give it a go

The purpose of the market is to allocate scarce resources because pretty much every resource is limited - so this is done by pricing for example, where an equilibrium forms between supply and demand js the price because at X price, Y number of people are willing to purchase

Specialisation works by increasing productive efficiency - by improving productive efficiency you get a greater output from the same level of input therefore making a net gain overall - if you're producing more efficiently, then a manufacturer is able to produce more of a product reducing the problem of scarcity

The market has what is called a pricing mechanism to allocate scarce resources - as a product becomes more scarce, the price of the product rises, meaning that increasingly things become more expensive, as they get more expensive, less people are willing and able to pay that price, so only those that are willing and able to purchase will do so and in that way the scarce resources are rationed to those who can afford them

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Yousf
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(Original post by Shahh112)
Been a while since I did any economics but I'll give it a go

The purpose of the market is to allocate scarce resources because pretty much every resource is limited - so this is done by pricing for example, where an equilibrium forms between supply and demand js the price because at X price, Y number of people are willing to purchase

Specialisation works by increasing productive efficiency - by improving productive efficiency you get a greater output from the same level of input therefore making a net gain overall - if you're producing more efficiently, then a manufacturer is able to produce more of a product reducing the problem of scarcity

The market has what is called a pricing mechanism to allocate scarce resources - as a product becomes more scarce, the price of the product rises, meaning that increasingly things become more expensive, as they get more expensive, less people are willing and able to pay that price, so only those that are willing and able to purchase will do so and in that way the scarce resources are rationed to those who can afford them

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Thank you, i appreciate it. Respected
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Shahh112
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(Original post by Yousf)
Thank you, i appreciate it. Respected
No worries

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