1. Scarcity and Abundance
Unit 1 Lesson 2

2. What are some examples of scarcity?

3. SCARCITY The Economics of Seinfeld The Stall
Scarcity is a condition where there is less of something available than at least some people would like to have if they could have them at no cost to themselves. Because the total quantity of goods and services that people would like to have always far exceeds the amount which available economic resources are capable of producing in all known human societies, people must constantly make choices about which desires to satisfy first and which to leave less than fully satisfied for the time being. That is, they must constantly decide how best to allocate (apportion or distribute) the scarce resources available to them among the various alternative uses to which they can be put. Thus, scarcity is the fundamental condition that gives rise to the patterns of choosing behavior whose study constitutes the main focus of the academic discipline of economics.
The Stall
Elaine is in the bathroom, and finds her stall out of toilet paper. She asks the woman in the next stall if she can spare a square, but the woman says no. The woman turns out to be Jerry's date, and eventually he defends her by likening the scarce toilet paper to water in the desert: “You wouldn't ask a dying man in the desert for his canteen, would you?”

4. Two Definitions of Scarcity
A situation in which human wants are greater than the capacity of available resources to provide for those wants.
A situation in which a resource has more than one valuable use.

5. Not Scarce. No alternative valuable use.
Which Examples Illustrate Scarcity? Directions: In pairs mark “S” at the end of the statement if you think the item is scarce. Mark “NS” if the item is not scarce.
Old economics textbooks collected in a bookcase near the teacher’s desk with a sign that says “Free books, take as many as you want.” The books have been there for three years.
Old economics textbooks collected in a bookcase near the teacher’s desk with a sign that says “Free books, take as many as you want.” Another sign posted in the hallway says “$10 paid for any recycled textbook. Bring books to the Principal’s office.”
One economics textbook, five students who wish to do well in the economics course, and an important test in class the next day.
One economics textbook, five students who are not taking economics, and an important test in the economics in the economics class the next day.
Petroleum in Japan, a country without its own oil fields and without oil reserves.
Petroleum in Saudi Arabia, a country with many oil fields and oil reserves.
Not Scarce. No alternative valuable use.
Scarce. The books may be read or they may be recycled. Two valuable uses.
Scarce. The one book could be used by the five different people; it has valuable alternative uses.
Not scarce. Same number relationship, but the information in the book is not valuable to the five students.
Scarce. Petroleum has many valuable uses in Japan.
Scarce. Petroleum has many valuable uses in Saudi Arabia, and it can be sold to other people in other countries. Several valuable uses.

6. There are situations where scarce resources are treated as if they were not scarce because the people involved don’t personally find the resources to be scarce. Behavior in these cases often leads to waste and poor use of the resource.
Teachers assign unnecessary homework to their classes, not recognizing that the students have many assignments from many classes. The teachers do not bear the cost of the assignment overload (how to spend the scarce study time?), so they may neglect to take scarcity into account when they assign students their homework.
Land used as a site for new school buildings was once prime wildlife habitat. The people designing the school had no interest in wildlife, so to them there was no cost in using the land for construction of a school.

7. Are People Treating Scarce Resources as Scarce
Are People Treating Scarce Resources as Scarce? Directions: In pairs mark an “S” at the end of the statement if you think the item is scarce. Mark a “NS” if the item is not scarce.
Water fountains in Rome flow continuously with water carried by viaducts from the Italian mountains. People walking in Rome quench their thirst by drinking from the fountains. But most of the water flows into the street and down the drains to a river that passes through the city.
At closing time, restaurants in the United States are required to throw away all uneaten food. To meet health standards for food preparation and the safety of consumers, the food cannot be stored for use the next day. Also, the law prohibits restaurant employees from giving the food to the poor or dispersing it to local food banks.
Oxygen is taken from the air and stored in containers. When divers wish to stay underwater for long periods of time, they purchase container-stored oxygen and breathe from it during their underwater activities.
Pebbles are taken from a beach to build a walkway in a homeowner’s lawn. No one else wants the pebbles. The pebbles are not necessary for the lake’s ecosystem or animal habitat.
A farmer has a water irrigation contract that requires the water user to use the entire allocation of water to water crops, whether or not all the water is needed for crop irrigation. If the farmer does not use all the water, he or she will receive a smaller allocation next year.
Scarce resource treated as not scarce. The water has other valuable uses, such as irrigation or sewer treatment.
Scarce resource treated as not scarce. The food could feed hungry people; it could be stored for future consumption; or it could be used as compost to improve soil conditions in gardens.
A difficult example. Oxygen in the air around us is not scarce. People routinely acquire it at no cost. There is more of it than individuals can use. But oxygen underwater is scarce, as are the resources needed to capture oxygen and store it in containers for underwater use. So container-stored oxygen is scarce.
Not scarce. The pebbles have no valuable alternative use. The resources necessary to move the pebbles (time and effort, for example) are scarce. They could be used for other valuable purposes.
Scarce resource treated as not scarce. The farmer is prohibited from considering other valuable uses for the water.

8. A Scarcity Activity

9. Closure Concepts Objectives
Identify two definitions of the term scarcity.
A situation in which human wants are greater than the capacity of available resources to provide for those wants.
A situation in which a resource has more than one valuable use.
2. Select examples consistent with the two definitions.
See: Which Examples Illustrate Scarcity?
3. Identify conditions that might cause people to treat scarce resources as if they were not scarce.
The waste of food and water.
 Alternative One of many courses of action that might be taken in a given situation.
 Choice Course of action taken when faced with a set of alternatives.
 Scarcity The condition that exists when human wants exceed the capacity of available resources to satisfy those wants; also a situation in a resource has more than one valuable use. The problem of scarcity faces all  individuals and organizations, including firms and government agencies.