scarcity

The basic problem on which classical economic theory is built: simply, that human wants will always exceed the resources available to fulfill those wants. This tenet was challenged by the rise of what John Kenneth Galbraith described as the affluent society.

Scarcity

The basic economic problem which arises from people having unlimited wants while there are and always will be limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently.

Investopedia Commentary

When we talk of scarcity within an economic context, it refers to limited resources, not a lack of riches. These resources are the inputs of production: land, labor, and capital.

People must make choices between different items because the resources necessary to fulfill their wants are limited. These decisions are made by giving up (trading-off) one want to satisfy another.

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See also: Economics, Guns and Butter Curve, Opportunity Cost, Seller's Market