Sample Economics Critical Thinking Paper on Resource Allocation

Question 1

The damage that may result from a hurricane striking Florida may lead to a high rate of destruction that may not only affect the rate of food production but also hinder the supply or distribution of the essential commodities. The affected individuals will have high-level demand on the basic necessity including shelter, food, and clothing. However, since the disaster limited the supply, there would be an equilibrium that may, in turn, lead to the increase in the price of different goods. From the case provided, the inability of the stores to support the desires of the citizens would require effective allocation of the available resources. As a business, the stores are likely to increase the prices of the available commodities and to repackage them if necessary so as to meet the increasing demand by the Florida residents. Moreover, the store manager may also restrict the number of goods that can be purchased by an individual to enable each member of the society to get a specific amount of the desired resources.

Question 2

The allocation of resources requires a general understanding of the needs of the affected persons. By increasing the supplies and the number of relief professionals in the area, Barrack Obama would have reduced the intensity of the calamity in the short run, but not permanently. The allocation of resources should, therefore, be based on the needs and preferences of the local citizens. This will help in reducing the level of demand since the satisfaction of the wants will help in reducing the cost of maintaining the population. It will also enable them to design ideas that may help them resume to their normal lives through identifying alternative ways to meet their desires.