Difference between revisions of "Artificial scarcity"
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[[Image:Ppfofdigitalinformation.gif|thumb|right|485px|[[Production possibilities frontier]] of showing trade-off.]] | [[Image:Ppfofdigitalinformation.gif|thumb|right|485px|[[Production possibilities frontier]] of showing trade-off.]] | ||
| − | With nearly all goods, a trade-off that occurs when decisions are decided about production. The graph shows the economic anomaly that occurs with artificially scarce products. Because leather boots | + | With nearly all goods, a trade-off that occurs when decisions are decided about production. The graph shows the economic anomaly that occurs with artificially scarce products. Because leather boots consume resources, a trade-off is noticed between running shoes; i.e. in order to produce more boots one has to give up producing running shoes because of limited resources. This trade-off is illustrated by a move from P1 to P2 in the Production Possibilities graph on the left. |
With computer software, no trade-off occurs (at least not one of significant value). To produce more of a certain piece of digital information, since virtually no resources are used to copy the information there is no trade-off with the production of other things, like shoes and boots. In essence, problems of artificial scarcity usually arise when a good that was once scarce becomes abundant due to extreme increases productivity and technology.[http://www.automation.com/sitepages/pid1698.php] | With computer software, no trade-off occurs (at least not one of significant value). To produce more of a certain piece of digital information, since virtually no resources are used to copy the information there is no trade-off with the production of other things, like shoes and boots. In essence, problems of artificial scarcity usually arise when a good that was once scarce becomes abundant due to extreme increases productivity and technology.[http://www.automation.com/sitepages/pid1698.php] | ||