Scarcity is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. A common misconception on scarcity is that an item has to be important for it to be scarce. This is not true, for something to be scarce, something must be given up, or traded off, in order to obtain it. Simply put, the price of a good signals the relative scarcity of the good.
For example, although air is more important to us than gold, it is cheaper simply because the production cost of air is zero. Gold on the other hand has a high production cost. It has to be found and processed, both of which require a great deal of resources. Additionally, scarcity implies that not all of society's goals can be pursued at the same time; trade-offs are made of one good against others. In an influential 1932 essay, Lionel Robbins defined economics as "the science which studies human behavior as a relationship between ends and scarce means which have alternative uses."
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- Abundance mentality (a concept by Stephen Covey, presented in The Seven Habits of Highly Effective People as standing in contrast to the scarcity mindset)
- Artificial scarcity
- Economic shortage
- Post-scarcity economy
- The psychological phenomena of the scarcity heuristic
- Robbins, Lionel (2014) . An Essay on the Nature and Significance of Economic Science (2nd ed.). London: Macmillan. p. 16.
- Milgate, Murray (March 2008). "goods and commodities". In Steven N. Durlauf and Lawrence E. Blume. The New Palgrave Dictionary of Economics (2nd ed.). Palgrave Macmillan. pp. 546–48. doi:10.1057/9780230226203.0657. Retrieved 2010-03-24.
- Montani, Guido (1987). "Scarcity". In Eatwell, J. Millgate, M., Newman, P. The New Palgrave. A Dictionary of Economics 4. Palgrave, Houndsmill. pp. 253–54.
- Malthus, Thomas R. (1960) . Gertrude Himmelfarb, ed. On Population (An Essay on the Principle of Population, as It affects the Future Improvement of Society. With Remarks on the speculations of Mr. Godwin, M. Condorcet, and other writers). New York: Modern Library. p. 601. Retrieved 2010-03-24.
- Burke, Edmund (1990) . E. J. Payne, ed. Thoughts and Details on Scarcity. Indianapolis, IN: Liberty Fund, Inc. Retrieved 2010-03-24.