Economics defines scarcity as the basic fact that only a limited amount of human and nonhuman resources exist. Even with the best technical knowledge available, these resources can produce only maximum amounts of each economic good.
Thomas Robert Malthus published An Essay on the Principle of Population in 1798. His work laid the theoretical foundation for debates on global hunger and famines that lasted almost two centuries.
Lionel Robbins served as a prominent member of the economics department at the London School of Economics. He famously stated that humans want what they cannot have and described economics as the science studying human behavior between ends and scarce means with alternative uses.
Scarcity falls into three distinctive categories: demand-induced, supply-induced, and structural. Demand-induced scarcity occurs when resource demand increases while supply stays constant. Supply-induced scarcity happens when supply is very low compared to demand due to environmental degradation like deforestation or drought. Structural scarcity exists when part of a population lacks equal access to resources from political conflicts or location.
Air is more important to us than gold yet less scarce simply because production cost equals zero. Free goods exist in quantities sufficient to gratify all dependent desires and allow no contest over ownership.