Economic choices refer to the decisions individuals, businesses, and governments make regarding the allocation of limited resources. These choices arise because resources, such as money, time, and materials, are scarce, meaning there is not enough to satisfy all wants and needs. For example, a family must decide whether to spend their budget on food, housing, or entertainment. When making economic choices, people weigh the benefits and costs of each option. This process involves considering what they gain from a choice compared to what they give up. For instance, choosing to buy a new car may provide convenience but could mean sacrificing savings for a vacation.