Understanding the Factors Causing Scarcity and Its Impacts

The factors that cause scarcity are – In economics the term scarcity is definitely very common to hear. Scarcity itself is a serious problem whose impact can hamper the smooth running of a country’s economic activities. The term scarcity itself refers to the absence of supplies of the goods sought. This is because any goods and services that are made to meet human needs are not enough to meet human needs.

The factors that cause this scarcity need to be understood by everyone. The problem is, this will affect every person and also the country. There are several factors that cause scarcity and the types of scarcity itself. To be able to understand more about the factors that cause scarcity, Sinaumed’s can listen to the article below.

Definition of Scarcity

In general, scarcity is a condition where humans will be faced with limited economic resources to be able to meet unlimited needs. In other words, scarcity is a condition where humans need something but it takes effort or sacrifice to get it.

According to the source.belajar.kemendikbud.go.id page , scarcity is a gap between limited economic resources and an unlimited number of necessities of life.

The definition of scarcity according to economics is a situation where the number of means of satisfying needs is less than the number of needs for these means of satisfaction. This situation will make humans make a choice among various profitable alternatives.

In economic theory it is said that resources have a value of zero or are worthless so that they can be said to be scarce. This means that the rarer an item is, the more valuable the sacrifice or price that must be paid to get it.

Characteristics of Rarity

You can detect whether an item currently on the market is experiencing scarcity or not with the following characteristics:

  1. Resources are insufficient or goods and services are limited.
  2. Human wants or needs are unlimited.
  3. The number of tools that meet your needs is very limited so it’s hard to get.
  4. The asking price will increase dramatically when compared to the usual price due to limited quantities and high demand for goods.
  5. customers or consumers must make sacrifices to be able to obtain goods or services, even sacrificing the needs of others to meet their more important needs.

Types of Scarcity

Scarcity itself has several types that can occur from several resources, including:

1. Scarcity of Human Resources

An economic activity definitely requires humans, humans do not only act as resources or producers but also as users of the results of these economic activities or commonly referred to as consumers.

An example of a scarcity of human resources is a shortage of labor in a company or an industry. This deficiency can be in the form of quantity or shows a physical amount or it can also be a lack of qualities such as the ability to think or skills.

In order to be able to deal with this problem properly, the community needs to improve thinking skills such as improving the quality of education, knowledge, expertise, insight and mastery of technology so that they can become skilled and qualified workforce candidates.

2. Scarcity of Natural Resources

All industrial process activities and services certainly require natural resources to be used. Natural resources are everything that exists in nature, including biotic resources (animals and plants) and abiotic resources (air, water, soil, climate and minerals). These resources will later be explored until finally they can be used by humans.

However, continuous use of natural resources and not re-using them will cause the existing resources to dwindle. Especially non-renewable natural resources and this will lead to scarcity of natural resources later.

An example is mining natural resources such as oil. When a paper factory needs oil to be able to operate a machine for making paper but the existing oil cannot meet the needs of the paper factory, so in the end the paper factory has to buy oil from abroad which will certainly cause transportation costs and more expensive costs.

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3. Scarcity of Entrepreneurship Resources (entrepreneurship)

Entrepreneurial resources are one of the factors of production whose functions and duties regulate and combine other factors of production such as (power, natural and capital), so that they can produce goods and services for human needs.

Qualified entrepreneurs can use existing resources to be able to create quality products that are very popular among consumers. However, if the number of people who are self-employed is still limited, it will also be very limited.

The way that can be done to overcome this problem is to have an entrepreneurial spirit by studying the success stories of entrepreneurs or increasing skills by taking other entrepreneurial classes.

4. Scarcity of Capital Resources

Capital resources are all man-made resources that can be used to facilitate the implementation of the production process. From these capital resources can produce goods or products that have value benefits to meet a human need.

The form of capital resources can be in various forms, such as cash or physical capital, such as raw materials, buildings, equipment and machinery. Weak capital resources will generate interest and skills in workers or human resources.

One way to overcome this is to have a strong desire to work and try hard and build and enhance creativity.

Causes of Scarcity

Well, Sinaumed’s is an explanation of the meaning of scarcity and also the types of scarcity that you need to know before knowing the causes of scarcity.

1. Population growth

The first factor is population growth and is a factor that must be an important concern. Rapid population growth means more needs to be met. If this need cannot be met properly, it will cause scarcity.

2. Differences in geographic location

The different geographic locations cause the distribution of resources in different areas. There are areas that have fertile soil, but there are some areas that do not have fertile soil but are barren and lack clean water.

3. Damage to natural resources

Even though all aspects of production will require natural resources, there are still natural resources that are damaged by human activities. Many elements finally let go of responsibility and do not care about the preservation of natural resources.

Examples that we can observe are illegal logging, land clearing and forest burning. Not only will it have an impact on the production process which will be difficult because the forest is already scarce, but it will have an impact on the environment such as the animals that live in the forest and there will be global warming.

4. Low production capacity

Production capability will be determined by factors of production in the form of labor, capital, natural resources, and also entrepreneurship. Production capability greatly influences the availability of goods or services as a means of fulfilling human needs.

Low and limited production capabilities will result in low production quantities. This can lead to unfulfilled human needs.

5. The slow development of technology

The technology used by manufacturers in the production process greatly affects the ability of the production process itself. If the process is slow and the application of technology is slow, it will result in not fulfilling human needs to the fullest.

6. Natural Disasters

Natural disasters such as floods, earthquakes, landslides, volcanic eruptions and other natural disasters will cause scarcity. This is one of the factors of scarcity that cannot be predicted by humans. After a natural disaster occurs, there will be damage to buildings, infrastructure and other natural resources which will be damaged and even cause casualties.

7. Pandemic

From 2020 to 2021 we have already felt the effects of the pandemic which has had such a negative impact on all levels of society. The pandemic occurred and caused an unpredictable scarcity. An example of the Covid 19 pandemic where there is a scarcity of hand sanitizers and masks so that their prices have skyrocketed.

This is also due to restrictions on community activities which cause the production of all goods to also stop. Therefore, it can lead to limited users of goods or services, human resources are also limited because many people become victims.

8. War

Apart from pandemics and natural disasters, war can also cause scarcity. A state of war will disrupt economic activities such as production, consumption, and distribution. This can also be felt today, namely during the war between Russia and Ukraine.

Impact of Scarcity

The scarcity that occurs will certainly have an impact that will be felt by the community. Here are the effects of scarcity that can be felt.

1. Price Increase

If demand is great and resources are few then prices will increase far from usual. This happens because whoever is fast then he who can and dares to pay higher will also get it. For example, during a pandemic, the prices for tissue and other basic necessities were still reasonable, but after the Covid pandemic, the need for food will increase and prices will become expensive because there is panic buying, so that many residents end up buying goods in large quantities and leaving scarcity for residents who other.

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2. Non-fulfillment of desires

If there is scarcity, it will prevent humans from fulfilling all their desires, in the end this condition will make them limit their spending to buy or use means of satisfying their needs.

3. Decreased social welfare

Scarcity will increase the price of production and the price of basic needs will increase. This can lead to a decline in social welfare. If it is not handled properly, it will increase the poverty rate and it will be difficult for the country to progress.

4. The unemployment rate is increasing

Means of satisfying needs are generated through production activities, distributed by distributors, then consumed. If scarcity occurs, it means there is a problem in its economic activities.

For example, the scarcity of cooking oil hampers the food production process. This problem can increase the unemployment rate. Due to the scarcity of resources, there is also a lack of income to pay for human labour.

5. Increased crime

If scarcity occurs and the community cannot meet their needs, it will result in people doing everything they can to meet their needs. In this condition, it has an impact on the potential for crime. This is because the business being carried out, if it is not proportional to the availability of jobs, then this business will not generate exchange rates.

6. The poverty rate has increased

The lack of resources capable of providing purchasing power results in an inability to meet needs. Unpurchased means of satisfying basic needs can be indicated as the emergence of poverty. The poverty rate that arises due to scarcity, has an impact on the difficulty of developing a developing country.

How to Prevent Resource Scarcity

After knowing several factors that cause scarcity and the impact that occurs when the scarcity occurs. The following is how to prevent scarcity because of course it will be easier to prevent scarcity than having to overcome scarcity.

1. Develop a priority scale

It is important for us as humans to set priorities and make plans. Planning is arranged based on a priority scale from the most important to the least important. By compiling this priority scale, it is a good step to overcome scarcity.

2. Save the use of natural resources

As explained above that all economic activities will require natural resources in the production process. Even though natural resources are abundant, if their use is not limited, they will be depleted and run out slowly. So that we as humans are expected to be wise in utilizing natural resources properly and not arbitrarily.

3. Maintaining Nature Conservation

Of course preserving nature is our obligation as citizens, especially the preservation of our country’s nature. This requires awareness in every human being in order to preserve natural resources. For example not littering in natural areas and replanting forests so that deforestation does not occur.

4. Improving the management of various natural resources

There are many ways we can improve natural resource management. For example, planting more trees and not hunting rare plants and animals, as well as selective logging in land clearing.

5. Creating substitute goods or substitute goods

These substitute goods are substitute goods that will replace other goods but do not eliminate the useful value of the goods being replaced. An example is replacing electricity with natural resources, namely sunlight.

6. Improving the quality of human resources

If quality human resources are reduced, it will cause minimal absorption of productive human resources. This will increase the unemployment rate and if there are many people who are less qualified then production development will also be hampered.

The way to overcome this problem can be done by providing new training for workers so that they can improve their abilities.

7. Manage capital resources properly

Managing capital resources, will relate to a person’s ability to set priorities in meeting needs. When managing capital resources goes hand in hand with setting priorities, this really helps someone manage their expenses properly and correctly.

For an entrepreneur, this can streamline operational costs, the hope is that with minimal capital, they can get maximum profits. This is what is called managing capital resources effectively.

Well, Sinaumed’s is an explanation of the factors that cause scarcity. We can start to save and also make good use of resources so that there is no scarcity. Hopefully all the discussion above is useful for you, Sinaumed’s.

If Sinaumed’s wants to read about books about scarcity or natural resources or other books, then Sinaumed’s can read and buy his books at sinaumedia.com .

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Author: Christin Devina


Reference :

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