Scarcity and choice:  

Scarcity implies that people want more than is what is available. Both individuals and society are limited by scarcity. For individuals, limited income (and time and ability) keep them from doing and having all that they might like. For a society, limited resources (such as manpower, machinery, and natural resources) decide the maximum on the amount of goods and services that can be produced. While economic resources are limited, human needs and wants are unlimited. Because of scarcity, choices have to be made on a daily basis by all consumers, firms and governments.

Scarcity entails choice. People need to choose which of their desires they will satisfy and which they will leave unsatisfied. When individuals or society choose more of something, scarcity will force them to take less of something else. Economics is sometimes called the study of scarcity because economic activity would not exist if scarcity did not force people to make choices.

When there is scarcity and choice, there are costs. The cost of any choice is the option or options that a person gives up. Economists refer to the foregone opportunities or foregone benefits of the next best alternative as opportunity costs. Opportunity costs are a part of every decision and activity. Each choice involves giving up something else.

Making a choice made normally involves a trade-off in simple terms, choosing more of one thing means giving up something else in exchange. This is often illustrated through the production possibility curve. Because wants are unlimited but resources are finite, choice is an unavoidable issue in economics.

Because of scarcity, choices have to be made on a daily basis by all consumers, firms and governments. For a moment, just have a think about the hundreds of millions of decisions that are made by people in your own country every single day.