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[1] Scarcity is the limited availability of a commodity, which may be in demand in the market or by the commons. Scarcity also includes an individual's lack of resources to buy commodities. [2] The opposite of scarcity is abundance. Scarcity plays a key role in economic theory, and it is essential for a "proper definition of economics itself". [3]
Researchers predict that similar cases of resource scarcity will grow more common as the world population increases. [ 20 ] British scholar Thomas Malthus , in his seminal work published in 1798 titled An Essay on the Principle of Population , forecast the potential depletion of the world's food resources due to the growth of human population.
The depletion of resources hinders economic growth because growing economies leads to increased demand for natural, renewable resources like fish. Thus, when resources are depleted, it initiates a cycle of reduced resource availability, increased demand and higher prices due to scarcity, and lower economic growth. [47]
The problem of allocation of resources arises due to the scarcity of resources, and refers to the question of which wants should be satisfied and which should be left unsatisfied. In other words, what to produce and how much to produce. More production of a good implies more resources required for the production of that good, and resources are ...
Many models of resource depletion and scarcity are Malthusian in character: the rate of energy consumption will outstrip the ability to find and produce new energy sources, and so lead to a crisis. [7] [8] [9] In France, terms such as "politique malthusienne" ("Malthusian politics") refer to population control strategies. The concept of ...
Hoarding resources can prevent or slow products or commodities from traveling through the economy. [4] Subsequently, this may cause the product or commodity to become scarce, causing the value of the resource to rise. A common intention of economic hoarding is to generate a profit by selling the product once the price has increased.
Because productive resources are scarce, the resources must be allocated to various industries in just the right amounts, otherwise too much or too little output gets produced. [2] When drawing diagrams for businesses , allocative efficiency is satisfied if output is produced at the point where marginal cost is equal to average revenue.
Scarcity rent is one of two costs the extraction of a finite resource imposes on society. The other is marginal extraction cost--the opportunity cost of resources employed in the extraction activity. Scarcity rent is the cost of "using up" a finite resource because benefits of the extracted resource are unavailable to future generations.