Decision-Making

People have economic wants that can be satisfied with goods and services. But because of scarcity, people cannot have everything they want. Because of this, everyone has to make choices about what to buy.

There are three types of decision making: personal decision-making (making a decision for you), family decision-making (making a decision for your family), and community-decision making (making a decision for your community). Scarcity influences all of these decisions. How much of a good or service is available? How much money does someone have to spend on a good or service? These factors play a role in the decisions people make about their unlimited wants.

The family in the picture above has to make choices at the amusement park. What rides will they go on? What food will they eat? What games will they play? They may have unlimited wants, but they have limited resources that cause them to make choices.

The mom and dad took $100 to spend at the amusement park. They bought tickets to get in that cost $20 per ticket. They budgeted $40 for food. Tommy wanted a hot dog, french fries, an ice cream cone, and cotton candy. Even if his mom and dad bought no food for themselves, the cost for Tommy's meal would be too much. This is where family decision-making occurred. As a family, they had to decide what food to buy so that each person could eat. They decided they would have enough money for Tommy to choose one treat. Then Tommy had to engage in personal decision-making: He had to choose an ice cream cone or cotton candy.

Because the family had limited resources and unlimited wants, they had to make decisions.

Imagine that members of your community want to plant a garden that grows 15-20 different fruits and vegetables to help feed those in need. To make this work, community decision-making would need to occur based on the scarcity factors. See if you can determine what the limited resource is for each question. What if there was only enough garden space to grow 10 fruits and vegetables? What if they needed more volunteers to help plant the garden? How could they get more help? What if they had too many families that were in need and not enough food to supply them?

Scarcity affects the decisions people, families, and communities have to make.