<P> The economic problem--sometimes called basic or central economic problem--asserts that an economy's finite resources are insufficient to satisfy all human wants and needs . It assumes that human wants are unlimited, but the means to satisfy human wants are limited . The economic problem is the problem of rational management of resources or the problem of optimum utilization of resources . It arises because resources are scarce and resources have alternative uses </P> <P> Three questions arise from this: </P> <P> What to produce? </P>

Explain what is meant by basic economic problem