What is Scarcity and Its Examples

Scarcity can be defined as a problem which happens due to human beings having unlimited wants and needs on one hand and on the other hand the world resources for satisfying those needs and wants are limited in quantity. Thus society or people have to make choices between their needs and wants because everyone cannot have everything. Those choices are in turn determined by the prices which people have to pay to satisfy those needs and wants.

Because there are some goods which are free like air, sea water etc…, and so they are called free goods and other goods which are scarce are called economic goods. However scarcity should be differentiated from shortage because shortage can be defined as a situation in which demand exceeds the supply at a particular point of time and therefore it is temporary while scarcity is one which is permanent.

There are some goods which are grown seasonally and hence at particular periods of time there is scarcity of such goods for only a particular period of time like, some fruits or vegetables are available in abundance for particular period only. Also after some point of time there is scarcity of free goods like in today’s world though air is free but clean air is scarce.

Tags: ,

Leave a comment