Scarcity
noun · Economics
Definition
The condition that resources are limited while wants are unlimited.
Explanation
Scarcity forces choices and creates opportunity costs.
Example
Time is a scarce resource.
Common confusion
Scarcity is not the same as shortage. A shortage is a market imbalance.
Related terms
- Opportunity costThe value of the next best alternative given up when a choice is made.
- Trade-offA situation where gaining more of one thing means having less of another.
Study guides that use this term
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