Scarcity is defined as the realistic condition that resources are limited, and in turn, prevents all human wants to be fully satisfied. It’s the start point where all economic problems derive themselves, thus making it necessary for people to make choices between things, what and how much others to give up to get the most favored ones.
Big wealth doesn’t grant you the power to wipe out scarcity and waive the necessity for choosing and forgoing. No matter how rich you are, you have to make choices every day, giving up things to get those more wanted. Confronted with scarcity, each and every one of us is doomed that we can never get all we desire.
Managing scarcity primarily concerns processes that exchange resources represented in value, thus bringing the biggest possible satisfaction to everyone in society with given limited resources. In order to do this, a market institution, the system of trade is introduced.
Take a society of a dog and a cat for instance. The dog has fresh fish(Though this is a third animal in the society, let’s just consider it as a consumable resource) while the cat got a tasty bone. The resources are given, that is a fish and a bone in total. However, since the dog doesn’t like eating fish and neither does cat with the bone, the total satisfaction of society is therefore at a very low point. Then they learned to trade and each got what they really want from the other, thus raising the total satisfaction or welfare of the hypothetical society much higher than before. This is how scarcity is managed. In a sense, Economics is mainly about the management of scarcity.