Question

problems of allocation of resources arises because

Answer 1

Answer:

The problem of allocation of resources arises due to the scarcity of resources, and refers to the question of which wants should be satisfied and which should be left unsatisfied. ... If the community decides to produce capital goods, resources must be withdrawn from the production of consumer goods.

Answer 2

Following are the problems related to allocation of resources in economy:

1. What to produce.
2. How to produce.
3. For whom to produce.

These problems arise out of scarcity of resources. In each economy, there are unlimited human wants but limited resources. All the humans want cannot be satisfied by the resources available on earth.