Scarcity – The 21st Century Crisis
by – Marcus Fernandez

Scarcity refers to the limited resources due to which the economic problem arises. Scarcity occurs when there are unlimited wants but only limited resources. Scarcity leads to the basic economic problem which states that human wants are infinite but resources are limited.

It is the human nature to want more and as the population of the world increases so does the demand, when the demand for a resource exceeds the supply of that product scarcity arises. For example if a shop has a supply of a hundred apples but a demand from two hundred people the shop will face a scarcity of apples, to counter this the shop may then decide to raise the price to reduce demand, now the people will have to make a choice, do they really need the apples at the higher price? This shows that scarcity leads to several choices for suppliers, consumers and producers.

When scarcity affects resources the impact is severe, as the demand is higher than the supply of the resource that may be depleting. Today oil, coal, water and physical land are facing major scarcity. Oil and coal for example are our main sources of fuel essential for transport and energy, however as these resources are non-renewable and being exploited by the growing population they are fast depleting and soon may disappear for good.

Scarcity Refers to Limited Resources Due to Resources due to which, The Economic Problem Arises

Author Introduction:

Hey! I’m Rishita from Grade 9A. Math and Economics enthral me the most!

     Needs are the basic necessities of a human being without which he cannot survive, such as food, water, shelter and so on. Wants, on the contrary, are desires that humans yearn for to possess, but can do without. With the aim of satisfying these needs/wants, resources are used. A resource would be referred o as something that is used in the production of other needs and services; these may be natural (land, reserves, labour) or man-made (capital & entrepreneurship).

     In order to satisfy our requirements and maximize economic welfare, such resources are availed. However, the condition that prevails when the capacity of existing resources fail o accomplish our unlimited wants is SCARCITY. For instance one can say that fresh water is globally scarce, and so are the non-renewable resources (coal, petroleum). As a consequence, other predicaments, such as the economic problem, stem from scarcity.