The problem of scarcity; wants are unlimited but resources are finite, so choices have to be made. Resources have to be used and distributed optimally.
Choices lead to opportunity cost
The value of the nextbestalternativeforegone.
Example of opportunity cost
"If a car was bought for £15,000 and after 5 years the value depreciates by £5000, the opportunity cost of keeping the car is £5000 (which could have been gained by selling the car), regardless of the starting price."
