Essay: Discuss whether the Basic Economic Problem will ever be solved

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22/09/09

‘Discuss whether the Basic Economic Problem will ever be solved ’

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 which 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 problem of scarcity of economic goods, choices have to have made every day everywhere, at all levels of society and business, this is what we call opportunity cost. Regarding the basic 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 and 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 own conclusion.

The main argument for, the basic economic problem 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 huge 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 themselves 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. The question, still remains is if the Basic Economic Problem will ever be solved. Here, I am arguing for that it can be solved and I believe that if governments around the world began funding more research into these alternatives then we could maybe see the end of the problem, but funding this will cost governments a huge percentage of their budget.  Another argument that the problem will be solved is that people will eventually learn to conserve the current energy they have and learn to only use it when they need to. This will be a big turning point to solving the problem because, obviously, resources will be getting used up less and less all the time, and current production of these resources may balance out with what is been used and we will begin to see more of the scarce resources being used less and less and being saved for the future. Advancing technology will play a big part in the future if we are to solve the Basic Economic Problem as it gives us more ideas and clues on our alternatives to the problem and help on how to 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 and governments around the world are encouraging people to save on energy so 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.

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There is always an argument against, and that the economic problem will never be solved and 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 on ...

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*** The writer concentrates on looking at whether we can have unlimited resources. This is one of a number of possible approaches. They could consider other alternative economic systems that have been tried eg feudal, communism as means of addressing the 3 economic questions: what to produce, how to produce it and for whom. They have misunderstood the role of government in modern society.