Scarcity is a concept basic to all of economics: Goods having alternative uses can be increased only by sacrificing other resources or goods. Put another way, scarcity arises when wants are greater than means. Here is a third way to describe the same concept: everything in limited supply that is useful has a price.
Scarcity occurs when there is not enough of an item or service for everyone to have as much as they want at no cost. Anything that costs money is a scarce good. Anything that is always free, such as air is not scarce or is not demanded.
The economic definition of scarcity differs from our everyday definition of the word because anything that costs money is scarce. Although we do not typically think of commons objects, such as pencils, as being scarce, economics does include them within the concept of scarcity. This scarcity arises from the fact that most people are not capable of producing high-quality pencils on their own, or finding them in nature, so from an individual's perspective, the supply of pencils is limited to those available to her in the marketplace.
- the multiplication of the loaves
- the master's estate in the Prodigal Son
- an excess of fish found by casting the net on the other side of the boat
These examples highlight the local nature of scarcity and price. A good's price is determined by its supply and demand and is time and place specific. We can easily conclude that in heaven, prices and scarcity do not exist, but the scarcity on earth creates a price.