Construction Economics
TASK 1 1.1 Explain the economic principles related to construction industry, taking the following in to consideration;
Scarcity, Specialization, Division of Labour
Scarcity
This is the basic economic problem. Mainly Scarcity means that the resources are not enough to satisfy human wants fully or completely. In other words the resources are insufficient to produce all the goods and services humans might desire as the resources are limited and the human wants are unlimited. Here the resources mean the land, labour, capital and enterprise that are used to produce goods and services.
Land is the physical space on which production occurs, and the natural resources that come with it. Labour is the time human beings spend producing goods and services. Capital means long-lasting tools used in producing goods and services. Enterprise means organizing the other factors of production, decision making and risk taking.
The construction industry is no exception for this scarcity of resources. Therefore construction industry must use their resources in very efficient way to get a great success. For an example the land is the initial need for construction purposes and it is limited. In some popular cities, land price is higher than the building price because there is a scarcity for land in those areas. Mostly all over the world people has prompt to build high-rise buildings to overcome the problem of scarcity of land.
If we take Dubai in Middle East, currently the value of ten perches land is nearly fifty thousand therams (Dubai currency), Dubai doesn’t have that much of land area but this country is popular for the business purpose so country wants more land area. Due to this type of scarcity problem, contractors build the high-rise buildings those are commonly known. To overcome from this problem, in Dubai they filled the Palm sea city by soil beds and build attractive high-rise buildings above the filled areas in sea. Human has not stopped by that. Now they
Scarcity, Specialization, Division of Labour
Scarcity
This is the basic economic problem. Mainly Scarcity means that the resources are not enough to satisfy human wants fully or completely. In other words the resources are insufficient to produce all the goods and services humans might desire as the resources are limited and the human wants are unlimited. Here the resources mean the land, labour, capital and enterprise that are used to produce goods and services.
Land is the physical space on which production occurs, and the natural resources that come with it. Labour is the time human beings spend producing goods and services. Capital means long-lasting tools used in producing goods and services. Enterprise means organizing the other factors of production, decision making and risk taking.
The construction industry is no exception for this scarcity of resources. Therefore construction industry must use their resources in very efficient way to get a great success. For an example the land is the initial need for construction purposes and it is limited. In some popular cities, land price is higher than the building price because there is a scarcity for land in those areas. Mostly all over the world people has prompt to build high-rise buildings to overcome the problem of scarcity of land.
If we take Dubai in Middle East, currently the value of ten perches land is nearly fifty thousand therams (Dubai currency), Dubai doesn’t have that much of land area but this country is popular for the business purpose so country wants more land area. Due to this type of scarcity problem, contractors build the high-rise buildings those are commonly known. To overcome from this problem, in Dubai they filled the Palm sea city by soil beds and build attractive high-rise buildings above the filled areas in sea. Human has not stopped by that. Now they