is one of the fundamental economic theoretical principles in the operation of any economy.[citation needed] It asserts that there is scarcity; that is, that the finite resources available are insufficient to satisfy all human wants and needs. The question then becomes how to determine what is to be produced, and how the factors of production (such as capital and labor) are to be allocated. Economics revolves around methods and possibilities of solving this fundamental economic problem.
The economic problem arises mainly due to two facts: human wants are unlimited, but the means to satisfy human wants are scarce.