Economics Scarcity is a term used to describe the state of limited resources that human beings need and use in order to survive and thrive. In other words, it’s the idea that there isn’t enough to go around and that we must make tough decisions about how to best use what we have. This concept is at the core of economics and is reflected in pricing, wages, and other economic measures. Understanding scarcity allows us to be conscious of how our decisions can impact resource availability and utilization.