What is scarcity and what does it apply to?

• Scarcity is a state where there are not enough resources to meet human wants and needs. It can also be defined as, if the resources available to the individual are insufficient to satisfy all their desires, then the resources are said to be scarce. It becomes difficult to meet all the human wants due to limited resources in the economy.

-Scarcity applies to all economies. It affects the choices made by individuals and the government sectors. All nations should be in a position to allocate their limited resources to meet the wants of their citizens.

-Producers have to choose to allocate resources to be able to maximize profits. They experience scarcity of factors of production since they are unavailable in sufficient quantities to satisfy unlimited wants of consumers.

Consumers are said to have a limited income, and unlimited wants to satisfy with their income.