What is the primary reason for economic scarcity, which leads to the need for resource allocation decisions?

Economic scarcity happens because our wants and needs are greater than the resources available to satisfy them. There are limited resources like money, time, and materials, but people always want more things, like food, clothes, and entertainment. This mismatch creates a situation where we have to make choices about how to use what we have. For example, if a family has a fixed budget, they must decide whether to spend it on groceries or new clothes, as they cannot afford both. Therefore, scarcity forces us to prioritize and allocate resources wisely to meet our most important needs.