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DECISION LAG: The time lag that it takes government leaders and policy makers to determine the appropriate government action needed to address an economic problem. The decision lag arises because it takes time for policy makers to chose among the array of possible policy actions, each with assorted consequences that appeal differently to different political constituencies. This "inside lag" is one of four policy lags associated with monetary and fiscal policy. The other two "inside lags" are recognition lag and implementation lag, and one "outside lag" is implementation lag. All four policy lags can reduce the effectiveness of business-cycle stabilization policies and can even destabilize the economy.
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                           SCARCE RESOURCE: A resource with an available quantity less than its desired use. Scarce, or economic, resources are also called factors of production and are generally classified as either labor, capital, land, or entrepreneurship. Scarce resources are the workers, equipment, raw materials, and organizers used to produce scarce goods. Like the more general society-wide condition of scarcity, a given resource falls into the scarce category because it has a limited availability in combination with greater (potentially unlimited) productive uses. Adding the word "scarce" before the word "resource" signifies that a resource has limited availability relative to desired use and is thus subject to economic analysis. A scarce resource is typically exchanged through a market. Buyers pay a price to obtain the resource and sellers give up the resource in exchange for payment.ScarcityAs the term suggests, a scarce resource can be traced to the fundamental problem of scarcity. Scarcity is the widespread condition of limited resources and unlimited wants and needs. A scarce resource is more specifically a resource with limited availability relative to desired use. The two concepts are closely related. Scarcity is the general problem underlying the study of economics and a scarce resource is a specific resource that reflects this general scarcity condition.The contrasting notion of a scarce resource is a free resource. A free resource is one that is plentiful enough to satisfy all desired uses, often with some left over. Market ExchangesBecause limited availability means that a scarce resource has more uses that it can meet, it is generally exchanged through a market. The market price serves to allocate the resource to its most satisfying and valuable uses. Users gaining the greatest benefit from the scarce resource are willing to pay the highest price and can thus out bid other potential users to gain control. Moreover, payment received by those who have control of the scarce resource compensates for the opportunity cost of foregone alternatives.Scarce GoodThe word "scarce" is also added to the word "good" to reflect a similar concept. The difference is that a scarce resource is used to produce a scarce good. The resource is transformed or used for production and the good is then used to provide satisfaction. However, in both cases the item is limited relative to the desired use.Factors of ProductionAnother, more common, name for scarce resources is factors of production--labor, capital, land, and entrepreneurship. Labor includes the mental and physical human efforts. Capital includes machinery, equipment, buildings, and structures. Land includes naturally occurring raw materials. Entrepreneurship includes the risk-taking organizers of production. A Word About ShortagesAt first glance, a market shortage would seem to be the primary source of a scarce resource, that the two are one and the same thing. A closer look, though, reveals otherwise. A shortage depends on the existing market price. If the market price is below the equilibrium price, then the quantity demanded exceeds the quantity supplied AT THE MARKET PRICE, and a shortage results. However, at a different price, the shortage vanishes. In contrast, a scarce resource exists if the desired use exceeds the available quantity at a ZERO price. While a scarce resource might experience a shortage, it can also experience a surplus, if the price is such that quantity supplied exceeds quantity demanded.
Recommended Citation:SCARCE RESOURCE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: April 26, 2024].
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Today, you are likely to spend a great deal of time searching for a specialty store trying to buy either a black duffle bag with velcro closures or any book written by Isaac Asimov. Be on the lookout for cardboard boxes.
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Only 1% of the U.S. population paid income taxes when the income tax was established in 1914.
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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