Question

Respond to the following question with three well composed paragraphs:

Does the fact that something is abundant mean it is not scarce in the economic sense? Why or why not?

Answer 1

No.

In economics, scarcity is seen as the scarcity of economic resources used in the production of goods and services. Scarcity of economic resource implies its limited availability for use. On the other hand, the abundance of any resource implies that its availability is unlimited.

For example, water is said to be abundant in supply but still it is scarce. 50% of the world may have water abundance but other 50 % is limited by its usage. Also, if some parts of the world face serious natural disasters like drought then water becomes even scarce even though it is available in rest of the world.

Another example is land. It is abundant on our earth and is available in unlimited quantities. Still it is scarce since some part of the land is not usable for the production of goods and services. For example, jungles, mountains etc.

So, we can conclude that abundance of any resource does not imply that it cannot be scarce.