Short answers, pulled from the story.
Scarcity in economics refers to the basic fact that only a finite amount of human and nonhuman resources exists, allowing only limited maximum amounts of each economic good to be produced. It is the gap between limited resources and theoretically limitless human wants. British economist Lionel Robbins defined economics itself as the study of human behaviour as a relationship between ends and scarce means which have alternative uses.
Absolute scarcity, associated with Thomas Robert Malthus, is the condition where human requirements exceed the available quantities of useful goods in an overall sense, and it increases as population and consumption approach the carrying capacity of the biosphere. Relative scarcity, the concept Lionel Robbins worked from, refers to the condition where multiple different human requirements are greater than the available quantities of goods with alternative uses. Modern economic theory holds that relative scarcity, not absolute scarcity, is the defining concept of economics.
In his 1798 book An Essay on the Principle of Population, Malthus argued that improvements in food production raise living standards only temporarily, because they trigger population growth that restores the original per-capita level. He described two types of checks on population: preventive checks such as moral restraint and delayed marriage, and positive checks such as disease, starvation, and war. This framework became known as the Malthusian trap.
Robbins, a prominent member of the economics department at the London School of Economics, defined economics as "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." He argued that this definition required four conditions, including a hierarchy of ends, limited means, and the necessity of choice. His definition focused on relative scarcity and remains one of the most cited in the discipline.
Scarcity falls into demand-induced, supply-induced, and structural categories. Demand-induced scarcity occurs when demand rises while supply stays fixed. Supply-induced scarcity occurs when supply drops sharply, often due to environmental degradation like deforestation or drought. Structural scarcity occurs when part of a population lacks equal access to resources because of political conflicts or geographic location.
A nonscarce good, also called a free good, is one that exists in quantities sufficient to satisfy all desires that depend on it, so it carries no economic value in the technical sense. As Frank Fetter explained in his Economic Principles, even goods indispensable to existence can be nonscarce if they are abundant enough that no one competes for ownership. A good is nonscarce if it has an infinite existence, no sense of possession, or can be infinitely replicated.