SCARCITYSCARCITY

By: AJ Par, Miko Isoola , Sungwon Hong

Scarcity is the fundamental economic problem of having seemingly unlimited human needs and wants, in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, 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

DEFENITIONDEFENITION

Goods and services that are scarce are called economic goods or simply goods if their scarcity is presumed. Other goods are called free goods if they are desired but in such abundance that they are not scarce, such as air and seawater

SCARCITY IN ECONOMICSSCARCITY IN ECONOMICS

fruits such as strawberries are scarce on occasion because they grow only at certain times of the year. When the supply of strawberries is lower, they are scarce, or not always available. If enough people want strawberries when none are available, then the quantity demanded exceeds the quantity supplied, resulting in a shortage.

EXAMPLEEXAMPLE

If something is difficult to get, then getting it demonstrates to ourselves and others that we are in control of our environment. Threatening to take something away is showing the other person that you are in control.

If something is not scarce, then it is not desired or valued that much. Praises from a teacher who seldom praises are valued more than praises from a teacher who is liberal with his or her praise.

Scarcity is non-linear process. As something becomes more scarce or less scarce, the desire for it does not change in a proportionate way.

If everything is scarce, then scarcity itself lacks its value and people become too used to it. Studies of retail sales have shown that if more than about 30% of goods have 'sale' sticker on them, the effectiveness of this method decreases.