Objectives:
Students will investigate how scarcity of financial resources affects wants and needs.
Students will understand the law of supply and demand as a major economic force.
Read this excerpt of an article on scarcity.
Scarcity refers to the limited availability of resources that are typically available for use. Also known as paucity, it is opposed to the theoretically infinite demand for resources that we have as a society.
In economics, scarcity refers to the gap between insufficient resources and the theoretic needs people have for these resources. In situations characterized by scarcity, societies have to decide how to allocate scarce resources efficiently, in order to address the needs and wants of the majority population.
In general, all resources that entail some cost during consumption can be considered scarce. In reality, however, what really has the most effect on society is relative scarcity.
Scarce goods are those that are associated with a virtually limitless demand. These can range from limited, valuable resources such as petroleum oil to T-shirts that go on a limited release from a designer clothing company. When a large number of people line up to purchase those shirts in excess of the supply, the shirts effectively become scarce goods. In contrast, goods that are readily available at little to no cost are known as non-scarce or free goods.
The scarcity of resources may lead to widespread price increase problems brought on by events such as famine, drought and even war. These problems occur when essential goods become scarce due to several factors, including the exploitation of natural resources or poor planning by government economists.
Because scarcity involves working with limited resources to satisfy unlimited wants, people are often compelled to choose from different alternatives. In most cases, they have to give up the expected value of one particular option in preference to the expected value of the next best option.
Source: https://www.indeed.com/career-advice/career-development/what-is-scarcityLinks to an external site.
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