What Is Scarcity?

If something is scarce it will have value. Goods that are not scarce will have a lower market value.   There are a finite (limited) number of workers, machines, factories, acres of land and reserves of oil on the planet. 

There is also a limited pot of money available to governments to finance their spending priorities - the Government cannot raise taxes too much to fund health and education without affecting other areas of the economy.

Productive resources are limited. Therefore, people cannot have all the goods and services they want; as a result, they have to choose some things and give up others.

 

Click here and watch the video to learn more about Scarcity.