Economics is said to be the “queen of sciences”. It is not only an academic subject that one study in the four corners of the classroom but one could apply its teachings and principles in daily life.
There are two great principles upon which the science of economics is founded upon. The first principle is the Principle of Scarcity while the second principle is the Principle of Multiplicity of Human Needs or Wants.
Consciously or unconsciously, one is using and encountering economics every day. How much money do you have? How much time do you have to do your homework or to finish you project before the deadline? Such question and the answer to it involve economics.
The Principle of Scarcity
Everything in this world is scarce and there is no such thing as unlimited supply of everything. Scarcity implies limitation. Take for example money or time. There is no such thing as unlimited supply of money. Even the the total amount of the money of a billionaires has a limitation or could be quantified to a certain extent.
Our time is limited. Each one of us is only given 24 hours a day. There is no such thing as 25 hours a day or 8 days a week as the lyrics of the Beatles song goes. Yes time is limited, fix and scarce.
The further example of scarcity is the supply of food and water. Why is there world hunger? Because of the scarcity in the supply of food. Even the world natural resources are limited say for example oil and natural gas.
The Principle Of Insatiability Or Multiplicity Of Human Needs
Human beings needs is multiple and complex. There is the thing that our human needs or wants is always insatiable or remains unsatisfied. That’s why we keep on producing and consuming more, whether they are essential or mere luxury goods.
Economist for quite a long time thinks about why human needs or want remains unsatisfied. Every person has his or her own personal needs or wants. It varies from one individual to another individual.
Human needs or human wants may be simple or complex. The basic human needs of food, shelter and clothing are simple necessity for some but complex for others.
In all economic decision making, whether in the individual level or on the national level, the Principle of Multiplicity of Human Needs must always be balance with the Principle of Scarcity as much as possible.
This can easily be said than done. Take for example the issue of world poverty or world hunger. You may ask yourself why there are some people in some part of the world that goes hungry while in some parts of the world there is even plenty and surplus of food supply?
Another example is the problem of international unemployment. Why is it that there is high unemployment rate in the developing country compared to developed country? Why such an imbalance?
These two fundamental economic principles even though seem to be quite simple and easy to understand are nonetheless often neglected and even taken for granted in so many economic-decision-making.
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That is so true. In developed countries, jobs abound and unemployment is not as high as those in developing countries like the Philippines.
One reason is that at developed countries, there are a lots of businesses that needs manpower. While in developing countries, businesses are just beginning to become many.
Another thing is that here in the Philippines, a lot of graduates are over qualified to the jobs they are in , because they just have to take those jobs since jobs in line with the courses they graduate are just a few. Sad, but there are a lot of graduates who are really unhappy with the jobs they have.
But if only there are more big companies, everyone can have a job in line with their jobs.