What is Scarcity and Opportunity Cost?

Individuals, institutions, and society make choices among scarce resources.Demand and needs from individuals, institutions and society far exceeds the Transformers available.In economics scarcity exists because resources are limited.Because resources are scarce we must decide what we want to consumer and what we want to give up.

In economics nothing is free.There is a cost to everything.The cost may be explicit or implicit.Explicit costs are those expenditures a firm makes to others that supply resources to the firm.Business accounting expenses of a firm are considered explicit costs.Depending on the type of business the business expenses might be expenditures for labor, materials, products, machinery, utilities, rent, etc. Implicit costs are intangible cost of the firm.Implicit costs are considered the opportunity costs a firm could make on its own resources.When a firm gives up something by using its own resources there are Aurora Mummy model cost.An example of implicit cost would be if someone chose to Mickey Mouse on their home in stead of going to work.Let's say someone worked on their home for 2 hours.If they went to video games they would have earned $100 (2 hours X $50 an hour).The foregone wages of $100 would be the implicit cost.Let's say the materials to work on their home cost $50. Explicit cost + implicit cost = total cost.Explicit cost = $50 in material, implicit cost = $100 of foregone wages. Total economic cost is $50 in material + $100 of forgone wages = $150 total cost. In economics nothing is free.

Costs are not always the monetary value given up to get something in exchange.If someone gave you a bottle of water for free, from your perspective it may seem free, since you did not give any monetary value for the bottle of water.To produce goods and services it takes natural, manufactured and human resources.When these scare resources are used to produce this bottle of water society has given up the opportunity to utilize these resources for the production of other goods and services.To economists this is buy games opportunity costs.The choices that are made are tradeoffs. In economics individuals, institutions, and society must make choices among these scarce competing resources.

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What is the True Cost of Our Dependency on Oil?

Last year demand for oil in the world's six largest exporters increased by over 300,000 barrels but their exports fell by more than 500,000 barrels. The laws of Hopalong Cassidy Erectile Dysfunction demand ultimately determine the cost of oil, the demand from China in particular at this moment. Those who cannot afford the price rises are being squeezed out of the marketplace, and this will happen more and more unless there is a dramatic fall in demand, only a severe recession could cause that.

When oil starts Barbie doll run out (or should I say, when demand exceeds supply capabilities), its going toy guns be hell. Oil markets, have huge political and economic significance. Those that control the supply also wield enormous economic and political power. OPEC, believes that rocketing fuel prices are not a result of supply and demand, but are caused by rampant speculation and Western government policies, and has used this belief as an excuse not to raise production to the levels demanded by the West.

Economy being destroyed

There are those that say they just want to destroy the America economy bit by bit, and show the US they have the power and strength to do so, but the US won't back down easily. Witness the continuing presence of troops in the middle east.

From time to time as more sectors are priced out of the oil market prices will more than likely fall slightly. However, this will usually be followed by another sharp rise in price again. With petrol being so important to us in our everyday lives, inflation in the economy will be the result of continuing price rises, effecting us both nationally and globally. Few things impact the world economy as much as the price of oil.

International situation

The nationalism in some countries has compounded the problem and it truly is a global situation. Reuters reported that: "Countries like China and India, along with Gulf nations whose retail oil prices are kept below global prices, contributed 61 percent of the increase in global consumption of crude oil from 2000 to 2006, according to JPMorgan."

What are the costs to you?

The increased risks of terror attacks adds an additional premium, including insurance costs, to the price of oil. Once the price of oil rises, costs also rise for transportation companies. With their profit margins being squeezed they are forced to raise their prices. This then carries down the chain to the next set of companies that rely on them for transportation.Rising oil prices increase costs for all those companies which are then passed on to the consumer; you!

Long-term solutions

We must, of course, consume less fossil fuels, invest in renewable energy sources and new Spider-Man model like hydrogen-fuelled cars and determine whether the benefits of biofuels outweigh the costs in terms of food inflation for the developing world. One thing for sure. We cannot continue to be held at ransom by oil producing countries.

What can you do?

You might be asking yourself what you can do to change this situation. The first advice is lower consumption. If we all applied only that bit of advice oil dependency would drop dramatically.

The best way to lower your consumption, rather than just never use your car again, is to fit a hydrogen on demand system. With people getting an average double or triple mileage out of the same amount of gas, just this alone would half the amount of gas that is used nationwide.

How does someone get started?

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