What term describes the limitation of resources to satisfy unlimited human wants?

The term that describes the limitation of resources to satisfy unlimited human wants is scarcity. Scarcity is a fundamental concept in economics that recognizes that resources, such as time, money, and materials, are finite, while human wants and needs are virtually unlimited. This imbalance creates the need for individuals, businesses, and societies to make choices about how to allocate their limited resources effectively.

Because resources are scarce, people must prioritize their needs and wants, leading to trade-offs and opportunity costs. Understanding scarcity is crucial for analyzing economic behavior, as it drives decisions at all levels, from individual consumer choices to government policies regarding resource allocation. This concept lays the groundwork for much of economic theory, influencing how economies operate and how markets are structured.