Scarcity refers to the fundamental economic problem arising from the gap between limited resources and theoretically limitless human wants and needs. It indicates that resources such as time, money, raw materials, and labor are finite, while our desires for goods and services are virtually infinite. This imbalance necessitates the need for decision-making regarding how to allocate resources efficiently. Scarcity leads to concepts such as opportunity cost, trade-offs, and prioritization in both individual choices and broader economic policies.
Define Scarcity
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