The Basic Economic Problem is that the resources we use on a day-to-day basis are scarce. These resources are called ‘economic goods,’ such as oil, land, steel and coal. There are also resources that are not scarce, as they are plenty of them, and we call these ‘free goods,’ such as food, water, air, and clothes. Due to the scarcity of economic goods, choices have to be made every day everywhere, at all levels of society and business; this is what we call opportunity cost. Regarding the fundamental economic problem, we are left to discuss whether it will ever be solved, and we will no longer have scarcity and the need to make choices or if resources will eventually run out. We will have to do without or find and produce alternatives.
There are both arguments for and against the issue; I will discuss both and come to my conclusion. The main argument for the fundamental economic problem that will be solved is that we are currently, as always, looking for alternatives for scarce resources, for example, we can use coal instead, where there are vast amounts of reserves all around the world, and it would be available for a lot less than the price of oil. There is a question, if the northern countries in the world can survive without oil, as they have little reserves, therefore are having to import it from other places in the world for huge prices, which reflects the price consumers have to pay for it, this is why countries’ governments have to look for alternatives such as coal, nuclear power and renewable energy.
Prices start at $12
Prices start at $11
Prices start at $12
The question still remains is if the Basic Economic Problem will ever be solved. Here, I am arguing that it can be solved, and I believe that if governments worldwide began funding more research into these alternatives, we could maybe see the end of the problem, but funding this will cost governments a considerable percentage of their budget. Another argument that the problem will be solved is that people will eventually learn to conserve the current energy and learn only to use it when needed.
This will be a significant turning point to solving the problem because resources will be getting used up less and less all the time, and the current production of these resources may balance out with what is used. Thus, we will begin to see more scarce resources being used less and less and saved for the future. Furthermore, advancing technology will play a big part if we solve the Basic Economic Problem. It gives us more ideas and clues on our alternatives to the problem and helps solve them. In conclusion, the argument that the Basic Economic Problem will be someday solved is that we are currently researching alternatives for our scarce resources. Governments around the world are encouraging people to save on energy to not use it up at the staggering rate we are currently doing. Also, advancements in technology will help us in producing alternatives to scarce economic goods.
There is always an argument against, and that the economic problem will never be solved. Therefore we will eventually run out of our current economic goods and will have to make do without. The problem is that we, as humans, have unlimited wants but don’t have the resources to match them. This happens at all levels; for example, on a global scale, the British Government may want to import 500 gallons of oil but will not have the resources to do so, so they will have to go without or find an alternative. This can also happen personally, as someone may see two things they like in a shop but only have enough money – which is a resource to buy one.
We generally call this opportunity cost. The fundamental problem is simple; we do not have the resources to satisfy all of our wants. Here, I am arguing against that the Basic Economic Problem will be ever solved, and my first point is that we are using up scarce resources – economic goods at an alarmingly high rate that we cannot continue, or we will run out of them. Examples of these include, most notably oil, steel and land. The growing population is having a detrimental effect on the Basic Economic Problem. As more and more people are entering the world, the birth rate is higher than the death rate, and therefore the scarce resources are required to be used more.
I mentioned before that governments are trying to find alternatives to scarce resources, pumping a lot of their money into such research. However, governments worldwide would not consider the Basic Economic Problem their top priority; for example, many governments are currently trying to cope with the recession and restart their respective economies. Others are fighting wars – such as Britain in Afghanistan and public pressure around issues will push the Basic Economic Problem down on government agendas. Another part of the problem is the fact that resources are not distributed evenly between countries and societies.
We can look at rich countries such as the UK and USA and see how much food is wasted each year by those countries, whereas in countries such as Zimbabwe basic needs like food aren’t being fulfilled. It seems that only rich countries’ citizens have all their needs and most of their wants satisfied, whereas in the poorer countries the people have to go without most of both their wants and needs. The fact is we do not have unlimited resources, however, we do have unlimited wants, that will never be attained. In conclusion, the argument against the idea that the Basic Economic Problem hangs on one key fact; we have unlimited wants but do not have unlimited resources to reach and achieve these wants. Tangible materials such as land, oil and steel are also becoming very scarce, therefore very expensive and less easy to obtain. These materials will eventually run out unless alternatives are found.
In general conclusion, I believe that the Basic Economic Problem can never be solved. There are a few key reasons why I believe this. The main one is yet again we have unlimited wants but finite resources to fulfil these, and human nature will continue to think and behave in this way. Another reason is that economic goods are eventually going to run out unless we find reasonable and affordable alternatives. Funding alternatives is a separate problem also, as many governments aren’t thinking about doing this, having other priorities and agendas. That is why I believe we will never solve the Basic Economic Problem and in the future, we will have to find alternatives or go without.