<P> The condition of scarcity in the real world necessitates competition for scarce resources, and competition occurs "when people strive to meet the criteria that are being used to determine who gets what ." The price system, or market prices, are one way to allocate scarce resources . "If a society coordinates economic plans on the basis of willingness to pay money, members of that society will (strive to compete) to make money" If other criteria are used, we would expect to see competition in terms of those other criteria . </P> <P> For example, although air is more important to us than gold, it is less scarce simply because the production cost of air is zero . Gold on the other hand has a high production cost . It has to be found and processed, both of which require a great deal of resources . Additionally, scarcity implies that not all of society's goals can be pursued at the same time; trade - offs are made of one goal against others . In an influential 1932 essay, Lionel Robbins defined economics as "the science which studies human behavior as a relationship between ends and scarce means which have alternative uses ." In cases of monopoly or monopsony an artificial scarcity can be created . Scarcity can also occur through stockpiling, either as an attempt to corner the market or for other reasons . Temporary scarcity can be caused by (and cause) panic buying . </P> <P> A scarce good is a good that has more demand than supply . This, according to economic laws, would have by nature an attributed price . The term scarcity refers to the possible existence of conflict over the possession of a finite good . One can say that, for any scarce good, someones' ownership and control excludes someone else's control. Scarcity falls into three distinctive categories: demand - induced, supply - induced, and structural . Demand - induced scarcity happens when the population or demand for the resource increases and the supply stays the same . Supply - induced scarcity happens when a supply is very low in comparison to the demand . This happens mostly due to environmental degradation like deforestation and drought . Lastly, structural scarcity occurs when part of a population doesn't have equal access to resources due to political conflicts or location . This happens in Africa where desert countries don't have access to water . To get water they have to travel and make agreements with countries who have water resources . In some countries political groups hold necessary resources hostage for concessions or money . Supply - induced and structural scarcity demands for resources cause the most conflict for a country . </P> <P> On the opposite side of the coin there are the nonscarce goods . These goods don't need to be valueless and some can even be indispensable for one's existence . As Frank Fetter explains in his Economic Principles: "Some things, even such as are indispensable to existence, may yet, because of their abundance, fail to be objects of desire and of choice . Such things are called free goods . They have no value in the sense in which the economist uses that term . Free goods are things which exist in superfluity; that is, in quantities sufficient not only to gratify but also to satisfy all the desires which may depend on them ." As compared with the scarce goods, nonscarce goods are the ones where there can be no contest over its ownership . The fact that someone is using something doesn't unable anyone else to use it . For a good to be considered nonscarce it can either have an infinite existence, no sense of possession or it can be infinitely replicated . However, a different stream of thinking with regard to scarcity states that there is no good that is truly non-scarce . Although some goods and materials appear completely abundant, ensuring quality standards of these goods creates costs to society . A prominent example can be the costs to reduce air pollution . Stating that non-scarce goods don't exist also follows the maxim "there's no such thing as a free lunch", one of the core theories in capitalist economic theory . </P>

What does scarcity have to do with economics