Scarcity in economic terms means that resources are limited and cannot satisfy all the human wants. A choice is the decision made from the opportunities presented. When a choice is made, the other best alternative foregone becomes the opportunity cost. The three economic phenomenons are related in with scarce resources, people are forced to make choices on which wants to satisfy. However, in doing so, some wants are foregone making them the opportunity cost (Mankiw, 2012). A good example is my friend who was given some money by his father to either go college or start a business. Scarcity comes in that in that the money cannot be enough for school and business. My friend thus has to make a choice. If he decided to go to college, starting a business becomes the opportunity cost and vice versa.

The problem of scarcity is experienced by countries and even the most affluent people including the business people. This is because human wants are unlimited. Every time a want is satisfied, another want comes up. In addition, with the forces of demand and supply, people do not always get what they want (Mankiw, 2012). However rich a person or country is scarcity is always experienced. The rich though with a lot of money still experience scarcity.

Personally, I always feel that scarcity is affecting me. I always have something to buy and the money is always never enough. Never in my life had I felt that I have all I ever wanted. At home right now, I want to further my studies but I also need to pay my brothers college fees. I cannot afford to satisfy both the wants. If I decide to further my studies, educating my brother becomes the opportunity cost and vice versa.

References

Mankiw, N. (2012). Principles of microeconomics. Singapore: South-Western Cengage Learning.

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