Every individual have unlimited wants but the resources for satisfying the wants are limited. Scarcity is the root of all economic problems. If there has been no scarcity there would have been no economic problem. This can be understood by examples.
1. Achild’s pocket money is limited so he/she has to choose only those things that they want the most. You can’t purchase almost all the things you want.
2. A land available should be put in use either in agricultural or industrial. We can’t use same land for both activities.
