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2. What is the fundamental problem of economics? Define it.

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Answer: the fundamental problem in economics is the issue with the scarcity of resources but unlimited wants. Economics has also pointed out that a man’s needs cannot be fulfilled. The more our needs are fulfilled, the more we want to develop with time. By definition, scarcity implies a limited quantity of resources. Ad a result of scarcity, there is a constant opportunity cost. Opportunity cost means that if you use your resources to consume a particular good, you cannot consume any other good with the given resource. Therefore, economists are concerned with dealing with the optimum allocation of resources in society to make the usage of these resources efficient as well as practical

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