Scarcity refers to the limited availability of a resource in comparison to the limitless wants. Scarcity may be with respect to any natural resources or with respect to any scarce commodity. Scarcity may also be referred to as paucity of resources.
A situation of scarcity requires people to judiciously or efficiently allocate the scarce resources to meet the needs of society.
Concept of Scarcity
A scarcity of resources arises when the resources or means to fulfil an end are either limited or costly.
Scarcity is an economic problem. It calls for the economic allocation of scarce resources to fulfil unlimited wants or needs.
Free natural resources could also become scarce resources due to the incremental costs of obtaining them and consuming them. Scarcity also arises in the case of an increase in demand in comparison to its availability.
Lionel Robbins defined 'Economics' as "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses". Thus, the study of 'Economics' facilitates the allocation of scarce resources.
In simple terms, money and time are among the most scarce resources. People have too little of the former, the latter, or both. People who have little or no work would have abundant time, but little money to pay for their basic necessities. People who have professionally demanding jobs might have enough earnings for retirement, but yet insufficient time to eat and rest.
Scarcity of a commodity or resource is relative to its demand. A resource which is of no use or not known to the people would not be scarce even when it is limited in nature.
Impact on Society
People need to explore new resources or create replacements for existing resources. An example of this is exploring and using alternative methods of energy generation for clean energy and reducing air pollution. Another example is recycling of water to enable efficient use of water resource.