Economic problems emerge due to scarcity of resources. We do not get adequate resources from the nature to satisfy all our needs. Thus an economic man always chooses for which purposes the resources are to be utilised. Robbins holds that Economics is the science of scarcity and it studies how the scarce resources are allocated in between different uses.
According to Robbins “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.”
Wants are unlimited. No economic problem would have arisen if man’s wants had been limited. But in the real life there is no end of wants. Wants come to half after the death of a man. Wants rise one after another. Wants differ in intensity. Some wants are more intense than others. As the wants differ in intensity, people allocate resources to maximise their want satisfaction.
As against wants means to satisfy these wants are limited. Unlimited resources would pose no economic problem as all wants would have been satisfied with unlimited resources. Thus there would have been no problem of choosing between the wants and allocating resources between them. The resources refer to natural productive resources, man-made capital goods, consumer goods, time available with man etc.
The scarce resources have alternative uses. The scan resources can be put into various uses. Monetary resources can either be utilised for the production of consumer goods or for the production of capital goods. The owner has to decide for which use resources should be allocated.
If the resources would have single use only the question of choice would not have arisen. It is because of the alternative uses of resources we have to decide the best allocation of resources.
With limited wants and unlimited resources a human being faces the problem of choice. The problem of choice arises due to the presence of limited resources and the resources are alternatively used. In the face of limited resources a man has to choose which want to satisfy first and which want to reject. He arranges different wants in order of their necessity for him.
The most urgent wants are satisfied and the less urgent wants are postponed for future. The Professor Robbin remarks, when time and means for achieving ends are limited and capable of alternative application and the ends are capable of being distinguished in order of importance, then behavior necessarily assume the form of choice.”