The Nature of Scarcity
- Lack of resources to produce all the wanted products.
- Resources are Scarce.
Definition of Scarcity
A situation where there is not enough to satisfy everyone’s wants
The continuing nature of Scarcity
- Growth in wants is exceeding the growth of economic resources.
- Wants continue to grow and change and thus Scarcity continues to exist.
The Economic Problem
- Unlimited wants exceed scarce resources.
- It arises because of scarcity. There is no limit to people’s wants – they are infinite. However, resources are finite.
- A mismatch, or disequilibrium between what people want and the maximum that can be produced, gives rise to the economic problem.
