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Scarcity

Scarcity

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Scarcity is the fundamental economic problem
Economic problem
The economic problem, sometimes called the basic, central or fundamental economic problem, is one of the fundamental economic theories in the operation of any economy. It asserts that there is scarcity, or that the finite resources available are insufficient to satisfy all human wants and needs...

 of having humans who have unlimited wants and needs in a world of limited resource
Resource
A resource is a source or supply from which benefit is produced, typically of limited availability.Resource may also refer to:* Resource , substances or objects required by a biological organism for normal maintenance, growth, and reproduction...

s. It states that society
Society
A society, or a human society, is a group of people related to each other through persistent relations, or a large social grouping sharing the same geographical or virtual territory, subject to the same political authority and dominant cultural expectations...

 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-off
Trade-off
A trade-off is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect...

s are made of one good against others. In an influential 1932 essay, Lionel Robbins
Lionel Robbins
Lionel Charles Robbins, Baron Robbins, FBA was a British economist and head of the economics department at the London School of Economics...

  defined economics as "the science which studies human behavior as a relationship between ends and scarce means which have alternative uses."

In biology, scarcity can refer to the uncommonness or rarity
Rare species
A rare species is a group of organisms that are very uncommon or scarce. This designation may be applied to either a plant or animal taxon, and may be distinct from the term "endangered" or "threatened species" but not "extinct"....

 of certain species
Species
In biology, a species is one of the basic units of biological classification and a taxonomic rank. A species is often defined as a group of organisms capable of interbreeding and producing fertile offspring. While in many cases this definition is adequate, more precise or differing measures are...

. Such species are often protected by local, national or international law in order to prevent extinction
Extinction
In biology and ecology, extinction is the end of an organism or of a group of organisms , normally a species. The moment of extinction is generally considered to be the death of the last individual of the species, although the capacity to breed and recover may have been lost before this point...

.

Scarcity in Economics


Goods (and services) that are scarce are called economic goods (or simply goods if their scarcity is presumed). Other goods are called free good
Free good
Free goods are what is needed by the society and is available without limits. The free good is a term used in economics to describe a good that is not scarce. A free good is available in as great a quantity as desired with zero opportunity cost to society....

s if they are desired but in such abundance that they are not scarce, such as air and seawater. Too much of something freely available can informally be referred to as a bad, but then its absence can be classified as a good, thus, a mown lawn, clean air, etc.

Economists study (among other things) how societies perform the allocation of these resources — along with how communities often fail to attain optimality and are instead inefficient. More clearly scarcity is our infinite wants hitting up against finite resources.

For example, fruits such as strawberries are scarce on occasion because they grow only at certain times of the year. When the supply of strawberries is lower, they are scarce, or not always available. If enough people want strawberries when none are available, then the quantity demanded exceeds the quantity supplied, resulting in a shortage.

Certain goods are likely to remain inherently scarce by definition or by design; examples include land
Land (economics)
In economics, land comprises all naturally occurring resources whose supply is inherently fixed. Examples are any and all particular geographical locations, mineral deposits, and even geostationary orbit locations and portions of the electromagnetic spectrum. Natural resources are fundamental to...

 and positional good
Positional good
In economics, positional goods are products and services whose value is mostly a function of their ranking in desirability by others, in comparison to substitutes. The extent to which a good's value depends on such a ranking is referred to as its positionality...

s such as awards generated by honor system
Honor system
An honor system or honesty system is a philosophical way of running a variety of endeavors based on trust, honor, and honesty. Something that operates under the rule of the "honor system" is usually something that does not have strictly enforced rules governing its principles...

s, fame
Celebrity
A celebrity, also referred to as a celeb in popular culture, is a person who has a prominent profile and commands a great degree of public fascination and influence in day-to-day media...

, and membership of elite
Elite
Elite refers to an exceptional or privileged group that wields considerable power within its sphere of influence...

 social groups. These things are said to derive all or most of their value from their scarcity. Even in a theoretical post scarcity
Post scarcity
Post scarcity is a hypothetical form of economy or society, in which things such as goods, services and information are free, or practically free...

 society, certain goods, such as desirable land and original art pieces, would most likely remain scarce. But these may be seen as examples of artificial scarcity, reflecting societal institutions - for instance, the resource cost of giving someone the title of "knight of the realm" is much less than the value that individuals attach to that title.

On the other hand, that ease with which some goods can be obtained or replicated (for instance, intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...

) led to the introduction of artificial scarcity
Artificial scarcity
Artificial scarcity describes the scarcity of items even though the technology and production capacity exists to create an abundance. The term is aptly applied to non-rival resources, i.e. those that do not diminish due to one person's use, although there are other resources which could be...

 in the form of legal or physical restrictions which limit the availability of such goods.

See also


  • Economic problem
    Economic problem
    The economic problem, sometimes called the basic, central or fundamental economic problem, is one of the fundamental economic theories in the operation of any economy. It asserts that there is scarcity, or that the finite resources available are insufficient to satisfy all human wants and needs...

  • Economic shortage
    Economic shortage
    Economic shortage is a term describing a disparity between the amount demanded for a product or service and the amount supplied in a market. Specifically, a shortage occurs when there is excess demand; therefore, it is the opposite of a surplus....

  • An Essay on the Nature and Significance of Economic Science
    An Essay on the Nature and Significance of Economic Science
    Lionel Robbins' Essay sought to define more precisely economics as a science and to derive substantive implications. Analysis is relative to "accepted solutions of particular problems" based on best modern practice as referenced, especially including the works of Philip Wicksteed, Ludwig von...

  • Value theory
    Value theory
    Value theory encompasses a range of approaches to understanding how, why and to what degree people should value things; whether the thing is a person, idea, object, or anything else. This investigation began in ancient philosophy, where it is called axiology or ethics. Early philosophical...

  • Post scarcity
    Post scarcity
    Post scarcity is a hypothetical form of economy or society, in which things such as goods, services and information are free, or practically free...

  • Rare species
    Rare species
    A rare species is a group of organisms that are very uncommon or scarce. This designation may be applied to either a plant or animal taxon, and may be distinct from the term "endangered" or "threatened species" but not "extinct"....