Resource scarcity

Question 1

When does resource scarcity occur?

Answer 1

When demand for a natural resource is greater than supply - leading to a decline in the stock of available stock of resources

Question 2

What can resource scarcity lead to?

Answer 2

Inequality; as prices will rise, leaving the less well off unable to afford it

Question 3

List the 4 factor enterprises used to supply goods and services?

Answer 3

Land, labour, capital and enterprise

Question 4

What is the economic problem?

Answer 4

This involves decisions about how to make the best use of scarce resources when not all needs and wants can be satisfied

Question 5

What is demand induced resource scarcity?

Answer 5

High market demand for a scarce resource

Question 6

What is supply induced resource scarcity?

Answer 6

Supply of a natural resource is running low over time due to high extraction rates

Question 7

What is structural resource scarcity?

Answer 7

Due to the mismanagement of resources leading to the long term degradation of the resources

Question 8

What is the main solution to resource scarcity?

Answer 8

Developing effective substitutes

Question 9

Describe the 3 most common causes of demand induced resource scarcity

Answer 9

• Fast growing national populations putting pressure on national resources
• Rising prosperity leading to increased ownership and use of resource intensive consumer durables
• Advances in production technologies and economies of scales, as these have made resource intensive consumer durables more affordable