Business Case Studies, Microeconomics Case Study, Trouble in Paradise, Cyprus

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Microeconomics Case Study

Case Title:

Trouble in Paradise: Water Scarcity in Cyprus

Publication Month and Year :  June 2009

Authors: Akshaya Kumar Jena

Industry: Beverages

Region: Cyprus

Case Code: ME0001

Teaching Note: Available

Structured Assignment: Available


The case is primarily meant to investigate the link between scarcity of resources and efficiency in resource allocation. While human wants are unlimited, the means to satisfy these are limited. Faced with this predicament, people – both as individuals and as society – embark upon a strategy of prioritising their needs to address the most important ones first. Water is one of the most basic needs of human beings as it pervades life on the Earth. The case takes a close look into the economic approach of Cyprus, which is afflicted with water scarcity. Whether scarcity pushes its economy to produce on its Production Possibility Frontier (PPF) and whether market pricing or governmental restriction should be the modus operandi in the allocation of its scarce water resources is carefully explored in the run of the case. Water-stressed Cyprus holds a fine template not only to discuss the various concepts like scarcity, desire, demand, PPF, opportunity cost, etc., but also to debate on the relative merits and demerits of the mechanisms used to coax or coerce resource allocation with an eye on obtaining economic efficiency.

Pedagogical Objectives:

  • To understand the concept of scarcity and its economic significance
  • To explore the link between scarcity and resource allocation
  • To debate over the efficiency between market pricing and government restriction in allocation of resources.

Keywords : Scarcity, Production Possibility Frontier, Free Good, Economic Good, Consumer Equilibrium, Scarcity and Managerial Decisions, Water Scarcity in Cyprus, Water Management of Cyprus, Economy of Cyprus, Link between Scarcity , Efficiency and Pricing, Managerial Economics, Microeconomics, Economics for Business, Business Economics, Economics for Managers, Paul Samuelson

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