Causes of arising economic problem are :
(1) Unlimited wants – human wants are unlimited. New wants arise as soon as Want gets satisfied. Thus, all human wants cannot be satisfied.
(2) Difference in intensity of wants – intensity of wants differs for different goods.
Few wants are very important for a person and less important for the other. On the basis of importance , every person keeps his unlimited wants on different priority basis.
(3) Limited or scarce Resources – Limited or scarce resources indicate that their demand exceeds their supply.
(4) Alternative uses of Resources – Resources are not only limited, but they have alternative uses also. For example, electricity can be used in fans, light, refrigerators etc. Again in this case also problem of choice arises i.e.how to use limited resources in different alternative uses.
(5) Problem of choice – no person, family or country can fulfil all its demand or wants through the limited resources. Thus, they face the problem of choice i.e. Which resources to be used in satisfying which wants and in which quantity ? In other words, the problem of choice arises and this problem of choice is also called ‘Economic Problem’.
It is clear from the above analysis that the problem of choice is basically an economic problem. If resources would have also been unlimited like unlimited wants, then there would have been no problem of choice. In other, words limited resources give rise to economic problems. In other words, unlimited wants and limited resources are the two pillars on which structure of all economic problems stand ‘’Economics’’ comes into existence only when the problem of choice arises.
