Definition of Scarcity
The scarcity definition was given by Professor Lionel Robbins in his book An Essay on the Nature and Significance of Economic Science published in 1932. He stated that Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.
He meant that Economics studies activities performed by man to obtain scarce means with alternative uses in order to satisfy their unlimited wants.
Features of Robbins’ Definition of Economics
Human wants are unlimited: The scarcity definition of Economics states that human wants are unlimited. If one
want is satisfied, another want crops up. Thus, different wants appear one after another.
Limited means to satisfy human wants: Though wants are unlimited, yet the means for satisfying these wants are
limited as the resources required to meet these wants are limited.
Efficient use of scarce resources: Wants are unlimited and are to be considered in order of importance. On the basis of such importance, scarce resources are to be used in an efficient method for the satisfaction of these wants.
Need for choice and optimization: Wants are to be categorized as the most essential and the least essential wants. Economics is also called a science of choice. Hence, scarce resources are to be used for the maximum satisfaction of essential human wants.
Economic and Non-economic Activities
An economy is a system which provides people with goods and services and directly or indirectly satisfies their wants.
Economic activities are the set of activities carried out by human resources to satisfy their needs. It is essentially concerned with the production, exchange and consumption of goods and services. For example, businessmen may make a profit or experience a loss, while labourers receive wages and
salaries as a remuneration of services rendered by them.
Activities which have no economic elements or are not concerned with money and wealth are known as
non-economic activities. There are various types of non-economic activities such as social activities, political activities, religious activities, charitable activities, parental activities and recreational activities. Examples of social activities are organizing marriage parties, attending birthday parties of friends and
relatives, while examples of political activities are meetings of various political parties such as the Congress, BJP and ADMK.
Meaning and Definition of Economics