In a scenario where a government has to decide between funding education or healthcare due to limited resources, which economic concept is illustrated by this decision-making process?

The situation where a government must choose between funding education or healthcare demonstrates the concept of scarcity in economics. Scarcity means that there are limited resources available to meet unlimited wants and needs. Since the government has a fixed budget, it cannot fully fund both education and healthcare, leading to a choice that prioritizes one over the other. For example, if the government decides to invest more money in schools to improve education, it may have to cut back on funding for hospitals, which could affect healthcare services. This decision illustrates how scarcity forces individuals and organizations to make choices and trade-offs based on their priorities.