Which economic concept indicates the need for choices due to limited resources?

Opportunity cost is the concept that reflects the need for choices because of limited resources. In economics, resources such as time, money, and raw materials are finite, which necessitates making decisions about how to effectively allocate these scarce resources.

When a choice is made to utilize a resource in one way, the opportunity cost represents the value of the next best alternative that must be forgone. For example, if an individual chooses to spend money on education instead of investing it, the opportunity cost is the potential income that could have been generated from the investment. This concept underscores the trade-offs involved in decision-making, highlighting that every choice has associated costs.

While market equilibrium, elasticity, and supply and demand are all important concepts in economics, they do not directly address the fundamental issue of limited resources and the necessity for making choices as opportunity cost does.