Define economic problem?

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. Economic problem is the problem related to the allocation of resources (or problem of choice) arising due to limited means in relation to unlimited wants..

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The problem of allocating scarce resources so as to achieve the greatest possible satisfaction of wants assume importance. this is known as economic problem

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Economic Problem:
The economic problem refers to the scarcity of resources in relation to unlimited wants and needs. It is the fundamental economic issue that arises due to the fact that resources are limited, while human wants are infinite. This discrepancy leads to the need for individuals, businesses, and governments to make choices about how to allocate these limited resources in the most efficient manner.

Key Points:
- Scarcity: Resources such as land, labor, and capital are limited, leading to a situation where not all wants and needs can be satisfied.
- Opportunity Cost: The economic problem necessitates trade-offs, as choosing to allocate resources to one need means sacrificing the opportunity to fulfill another need.
- Allocation: Decisions must be made on how to distribute resources among competing uses, whether it be producing goods and services, investing in technology, or providing public services.
- Efficiency: The goal is to allocate resources in a way that maximizes utility and minimizes waste, ensuring that society's needs are met with the available resources.
- Demand and Supply: The economic problem is reflected in the interaction of demand for goods and services with the supply of resources, influencing prices and production levels.
In conclusion, the economic problem stems from the imbalance between limited resources and unlimited human wants, requiring individuals and societies to make choices about resource allocation to address this fundamental issue in economics.

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