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Aug 16, 2012

Does scarcity really exist?

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Human wants are unlimited. There should be clear distinction between need and want in order to define scarcity. And more over it’s related to the state of mind of consumer in the behavioural economics.

In general term, scarcity exits due the law of nature and available of limited resources in the world. Wherever there is lack of goods or services, generally it is termed as scarcity. But the perfect definition of the scarcity is something different from the general usage of the term.

Since the human civilization is advanced much, the term scarcity seems not a good fit to some goods and services where substitute can takes place. Alternative to good and services can solve the question of scarcity.

In some assumptions, where there is no question of any substitute the scarcity exists. In the case of the gasoline there is few substitute option to run vehicles – electronic, solar, CNG or bio-diesel. If there any situation we face having no gasoline resources more, then we have few option left to choose among the alternatives. In this case we can see there is scarcity of gasoline.

We always try to pick the good one from the alternatives we have. As it’s a matter of choice always for the consumers. And if there scarcity, there will be no choice but to accept the situation. In the case of natural resources the scarcity is always there as we don’t know the amount of resources we have and how much time it will continue to meet our demands.


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