Economics and financial literacy , economics homework help

Answer the following question in a short one paragraph essay.

Write a personal account on how scarcity affected your life in the last week? Provide several examples of items you had to do without over the last week because of limited resources and explain how you adjusted to the situation. For an example on how your report should look, view the example below:

Example

My name is John and I am a 21 year old full-time college student who lives alone and works part-time as a fitness trainer. At the beginning of every week I plan my budget, and last week I had to buy groceries, gas, pay my electric, and cell phone bills and I had just enough money to cover each one. Most often, I make pretty good decisions regarding how I spend my money, but sometimes I can be impulsive. Last week, I bought groceries, gas and paid my electric bill and I went to one of my cell phone carrier’s store locations in the mall to pay my cell phone bill. While there, I did everything but pay the bill. On impulse, I spent the money I had aside for my cell phone bill on two final sale outfits and some new training shoes. My new outfits and shoes looked great but I didn’t have any money left to pay my cell phone bill so I was not able to. The next day, I awoke and tried to contact a client to personal train later that day, but my phone services was disconnected due to nonpayment. At that point, I was out of money and unable to return the final sale items to get the money back from, so I had to borrow money from my parents to pay the cell phone bill. As result, I was able to pay my phone bill and get my services reconnected but now I was in debt to my parents.

Examining the Example

Now, you do not have to add this to your assignment, but lets take a look at ways John encountered scarcity in this example:

1. Scarcity- He had limited funds- This is shown because he had to plan a budget, and only had money for his weekly budget expenses.

2. The situation- He had limited funds to sufficiently satisfy his impulsive purchases and pay his weekly budget expenses at the same time.

3. Item John went without- The cell phone service.

4. John’s way of adjusting to the situation- He chose to spend the money set aside for his cell phone bill which caused the phone services to get disconnected. He borrowed money from his parents to pay his phone bill and willingly went into debt to them.

Side Note: Similar situations like John’s occur often, like for many Americans who cannot afford a house and take out loans to buy one but they go into debt by doing so.

John’s limited funds= limited resources—>to cover every want (impulsive purchases & cell phone bill)–>scarcity