What Is Scarcity?

Scarcity refers to a state in reality when the amount of resources that people have within a certain period of time cannot meet people's desires. It reflects the contradiction between the infiniteness of human desire and the finiteness of resources. Just as a family cannot give every member everything they want, so a society cannot give everyone the highest standard of living they desire. ^[1]

Scarcity

Because of the nature of resources, economic research is required to allocate resources most efficiently and maximize human welfare.

Social resources are limited, meaning that the goods produced by society are limited and cannot satisfy all people's desires. ^[2]

Scarcity means that desire always exceeds the resources that can be used to satisfy desire. (Quoted from the 2009 edition of Yan Jiashui, Huang Guixin, << Basics of Economics >>)

It refers to that in a certain time and space, the overall finiteness of a specific resource is much smaller than the overall demand of human beings to satisfy desire in terms of the infiniteness of human desire and infinite growth of desire. Scarce resources cannot be found in a short time in terms of the number of years of human activity

1. Limited quantity, such as cultivated land, oil, fresh water, etc.

2. The ability of humans to obtain useful items is limited. Natural phenomena such as lightning, volcanoes, and wind contain abundant energy, but humans have no way to fully use them.

3. The population is rapidly expanding, and the expansion of the population size leads to less and less per capita resources

4. Human desire is infinitely inflatable

The scarcity of resources can be further divided into absolute scarcity and relative scarcity. Absolute scarcity means that the total demand for resources exceeds total supply. Relative scarcity means that the total supply of resources can meet the total demand, but uneven distribution will cause local scarcity. Generally speaking, scarcity is relatively scarce.

Frequently contacted scarce items can be divided into two categories: one is that you can get any number of items at will, such as air, and they are free goods without paying; the other is that you must obtain them through transaction methods, which are called scarce Economic goods, there is always a price to pay for these economic goods.

Necessity of choice

Due to the objective existence of scarcity, there is a contradiction between the finiteness of resources and the infiniteness of human desires and needs on earth. How to use the existing resources to produce "economic goods" to effectively satisfy human desires is the basis of human behavior in how to produce and choose.