Because productive resources are limited, the goods and services that can be produced from these resources are also limited. In contrast, the goods and services wanted by individuals and societies are virtually unlimited. This tension between unlimited wants and limited productive resources available for satisfying these wants is what economists refer to as scarcity. Thus, stereos, hot dogs, education, lawn mowers, T.V. repair services, and bubble gum are all considered scarce because many individuals desire these things, but their availability is limited.
Scarce goods and services command a price in the marketplace. The price indicates how scarce a good or service is relative to other goods and services. A good with a high price is relatively more scarce than a good with a lower price; thus a stereo is considered more scarce than a piece of bubble gum. Economically speaking, it is quite difficult to think of things that are not scarce. Some examples might include sand and water at the beach or the air you are breathing at this moment. But even air is scarce to the scuba diver or astronaut; and certainly clean air is scarce for the inhabitants living in cities. It is safe to say that in economics, most things in this world are considered scarce.
Scarcity is sometimes confusing to students because it does not correspond exactly to the common usage of the word. Are hot dogs and candy really scarce? They are readily available to most students, who would more likely apply the term to diamonds or gold. The key idea to point out to students is that hot dogs and candy are indeed scarce (they are not freely available and have a price), but they are less scarce than diamonds or gold.
The concept of economics wants is covered in Program 4, Scarcity, from the Herschel’s World of Economics DVD. Your students will delight in meeting Herschel, a dog puppet, as he learns about the challenges of making doggie treats!
Do the lesson on Scarcity in the very practical Half-Pint Economics curriculum.
Create a list of scarce goods; then a list of scarce services (or cut and paste pictures from magazines). Discuss and compare student lists. Then have students place estimated prices on the items in their lists. Discuss what the price represents (how scarce the good or service is relative to others).
List scarcity situations students face every day in the use of their time. Draw these scarcity situations and create a bulletin board display.
Identify scarcity situations in the school or classroom. Explain that school decision-makers have limited funds, but almost unlimited uses for those funds (supplies, computers, teacher salaries, team uniforms, playground equipment, etc.)
Write a paragraph about a scarcity situation students faced when purchasing a specific good or service. (choosing how to spend limited income on several desired items)
Create a poem or jingle about scarcity.
Discuss different jobs. List special skills that are needed for these jobs. Discuss how these jobs make a worker more scarce and provide a higher wage.
Analyze this statement: "If you want a good job, make yourself scarce!" (It’s true. Making yourself "scarce" by acquiring valuable skills will make workers more valuable to employers.)
Draw or cut out pictures of different kinds of natural resources. Discuss which of these are "very scarce." How do you know? (The price is high relative to the prices of the others.)
Use a resource map of the state to identify the scarce natural resources of certain regions.
LITERATURE
CONNECTION
You can
use the literature books below to help teach Scarcity. Click on the book cover or the title below
to obtain information on the book as well as guided questions you
can use with your students. Some books are no longer available
from the publishers, but we still include title information and
Lessons as you might have them in your school or public library or
possibly in your classrooms.
