Economic problem – The problem of choice that arises due to multiplicity of wants and scarcity of resources is called economic problem.
The main reasons for arising economic problems are as follows -
i. Unlimited wants - Human wants are many in numbers and recurring in nature. A man can not satisfy all of his wants and therefore it has to make a choice in order of priority/urgency.
ii. Limited resources - The resources are limited in relation to need for them. Therefore it has to make a choice that how to use the resources.
iii. Alternative use of resources - A resource can be utilised in a different way and for different purposes. Therefore choice has to be made among different uses of resources.
