What is defined as wanting more than we can obtain with available resources?

The concept of scarcity is fundamental to economics and is defined as the inability to have all the goods and services we desire because of limited resources. Essentially, scarcity illustrates the reality that resources, including time, money, and materials, are finite. Therefore, when individuals or societies have unlimited wants but must operate within constraints, scarcity becomes a pivotal factor that necessitates decision-making and prioritization.

In discussions about economics, scarcity leads to various implications, such as the necessity for trade-offs and opportunity costs. Individuals must prioritize their wants and needs because not all can be satisfied simultaneously. This principle of scarcity underpins many economic theories and models by signaling that choices must be made due to limited resources. Understanding this concept helps to grasp why certain economic policies and behaviors arise in response to resource constraints.