The basic economic problem is the issue of scarcity: resources such as land, labor, capital, and raw materials are limited, while human wants and needs are virtually unlimited

. This fundamental imbalance forces individuals, businesses, and societies to make choices about how to allocate their finite resources to satisfy as many needs and wants as possible. Because of scarcity, every society must answer three key questions:

• What to produce? Societies must decide which goods and services to create, given their limited resources

• How to produce? Societies must determine the most efficient methods for producing these goods and services, choosing between different techniques and resource combinations

• For whom to produce? Societies must decide how to distribute goods and services among their population, addressing issues of equity and access

These decisions involve opportunity cost, meaning that choosing one option means forgoing another

. Different economic systems (market, planned, or mixed economies) approach these questions in various ways, but all must contend with the basic economic problem of scarcity