The basic economic problem is that people have unlimited wants but there are are limited resources to satisfy these wants.
Decisions have to be made about how best to use the resources to satisfy as many of the wants as possible.
Needs are the things that are essential for people to live adequately.
Wants are the luxuries that people desire to make their life more comfortable
Resources: are the inputs available for the production of good and services.
Scarcity: a lack of something (in this context, resources)
The fundamental economic problem is that there is a scarcity of resources to satisfy all human wants and needs.There are finite resources and unlimited wants.
An economic good is one which is limited in supply such as gold, clothes, food etc. It is scarce in relation to its demand for the product and human effort is required to obtain an economic good.
A free good is unlimited in supply such as air, sunlight, sea etc. A free good has no opportunity cost in its consumption or production.