Scarcity in economics refers to limitation, specifically the limitation of supplies, raw materials, components, and goods. There is only so much land, so much labor, raw materials, only so many components, and only so many products.
We use the term scarcity when contrasting limited availability with unlimited human wants. Determining how to make the best use of scarce resources is fundamental to economics. the factors of production are not limitless, that is there is scarcity, therefore we must make choices about how best to use them, and this is where economics comes in.
The factors of production are land, labor, capital, and enterprise.
In the world of economics, we must learn to live with one basic problem, the gap between scarcity and unlimited wants.
It’s impossible to balance are virtually limitless human wants with limited resources and time. to satisfy those wants, suppliers need to determine how to use those limited resources carefully, if there were no scarcity, there would be no economics.
Imagine a world with no scarcity, that is a land of plenty, imagine that everything was limitless even time, metals, minerals, raw materials, and money. In a world with no scarcity, economists would have nothing to study, nobody would have to think carefully about how to allocate resources as all wants would be satisfied.