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Office Hours: Scarcity is not a Shortage

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Uploaded by on Aug 9, 2011

In this video I dispel one of the misconceptions that students have about the term scarcity. Students often think that because something is scarce that this must mean that there is a shortage of it. However, economist use the term scarcity to refer to any condition where a good is not freely available from nature. As a result, goods that are scarce can be abundant.

See more videos and economics learning resources at www.dirkmateer.com!

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  • I agree that the price of diamonds is inflated by cartels but they are still quite scarce and unavailable at a zero price.

  • Diamonds are not that scarce; there are cartels that limit the supply to prop up the price but at zero dollars there are plenty of diamonds out there.

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