Question

Can someone give me some insight on how the topic of scarcity, in general, plays a role in the decisions people make about their time and money at different stages of life? Thank you

Answer 1

Scarcity of resources is one of the prime reasons why decision making process actually get to arise on the whole in that is reason why concepts such as opportunity cost and production possibility Frontier come into play. When you take different stages of life opting for education over work or work over education can be considered one major decision that the the person should make and if he feels that he is scarce of money at that time even for living then he prefers work over education and if he feels that he is scarce of education and has enough money he prefers education over work. Also budget constraint is also one of the major reason where when your income is limited and you have many things to buy, you actually opt for things that would definitely have more utility and sacrifice things that would have relative less utility on the whole and here actually apply the concept of rationality in order to take a decision and here the scarce resources income and in this way scarcity of resources get to play a major role in the decision making process.