Scarcity

Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals can be pursued at the same time; trade-offs are made of one good against others.

Definition

In an influential 1932 essay, Lionel Robbins defined economics as "the science which studies human behavior as a relationship between ends and scarce means which have alternative uses." In other words, scarcity is the basic economic problem of how to manage limited (scarce) resources to satisfy unlimited wants.

Types of Scarcity

Scarcity can be classified into two main types: Absolute Scarcity and Relative Scarcity.

Absolute Scarcity

Absolute Scarcity refers to the total amount of goods or services that are available is less than the total amount of goods or services that are demanded.

Relative Scarcity

Relative Scarcity is the scarcity of resources in relation to demand, rather than in absolute terms.

Effects of Scarcity

Scarcity, in effect, can lead to several problems including economic inequality, resource depletion, and increased costs of commodities.

See Also

• Economics
• Resource Depletion
• Economic Inequality

References

Scarcity Resources
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