Understanding Scarcity | Scarce Resources and Categories of Scarce Resources

 

Understanding Scarcity | Scarce Resources and Categories of Scarce Resources

The term scarcity refers to the limited quantity of resources that are available to meet the unlimited needs and wants of society.

Scarce Resources

Scarce resources are fewer resources that are needed to fill human needs and wants. These resources can be resources that come from land, labor resources, or capital resources. These scarce resources can be broken down into the following categories.

1. Natural and Biological Resources

Land and mineral deposits are examples of scarce natural resources. The quality of these natural resources differs greatly from region to region. Some lands are incapable of growing anything in their natural state, and other lands are extremely fertile. Still, other areas are rich in coal deposits or oil and natural gas reserves. In recent years, our society also has become aware of the increasing scarcity of fresh water. Whereas energy-related natural resources have represented critical scarce resources in recent decades, water could become a critical scarce natural resource in the near future. In addition to natural resources, scarce resources also include Biological Resources such as livestock, wildlife, and different genetic varieties of crops.

2. Human Resource

Human resources are services provided by laborers and management for the production of goods and services that also are considered scarce. Laborers, for example, provide services that, combined with scarce nonhuman resources, produce economic goods. For example, workers in the automotive industry provide the labor input to produce cars and trucks. Farm laborers provide the labor input to produce crops and livestock.

Management, another form of human resource, provides entrepreneurial services, which may entail the formation of a new firm, the renovation or expansion of an existing firm, the taking of financial risks, and the supervision of the use of the firm’s existing resources so that its objectives can be met. Without entrepreneurship, large-scale agribusinesses would cease operating efficiently. Laborers=> Physical work and Management=> Mentally work. Human Capital: The training and education of human beings are included in human capital.

3. Manufactured Resources/ Capital Resources

The third category of scarce resources is manufactured resources or, more simply, the capital. Manufactured resources are machines, equipment, and structures. A product that has not been used up in the year it was made also is considered a manufactured resource. For example, inventories of corn raised but not fed to livestock or sold to agribusinesses represent a manufactured resource.