1.1.1—Scarcity problem

Scarcity is the fundamental economic problem: wants are unlimited relative to the finite resources available to satisfy them.

Because land, labour, capital, time and enterprise have alternative uses, choosing one use prevents some other use. Scarcity exists for individuals, firms and governments, even when a particular good is abundant.

A government with a fixed health budget cannot fund every hospital, treatment and prevention programme at once.

Scarcity does not mean a resource is rare or that everyone is poor; it means supply is limited relative to competing wants.