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How does scarcity affect the government?

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Quick Answer

Scarcity affects the way in which those in government distribute resources. According to Illinois State University's Dr. Jason Yonan, politics is the system that decides how a society allocates scarce resources. Altercation in the availability of resources, whether an abundance or scarcity of a good or service, changes the allocation.

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According to Harper College's Dr. Mark Healy, a scarcity involves a limited supply of a good or service along with a demand for the good or service. Scarcity occurs for both private and public goods. In fact, economists consider many items to be scarce. When a resource is scarce, government officials use restrictions, taxes and laws to determine the allocation. Both elected and unelected officials have the ability and power to divide up a given resource. Political affiliation and debate also influence the way in which a government divides a scarce resource.

Water is one example of a resource that undergoes scarcity. There is typically a finite amount of drinkable water in a given area. Especially in times of drought, a city government decides to increase the tax on water usage or put restrictions on water use. In this way, the government changes the way it allocates its resources due to a scarcity.

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