Problem of allocation of resources in an economy arises due to which of the following reasons?

Scarcity of resources

he problem of allocation of resources in an economy arises due to Option 2: Scarcity of resources. The concept of scarcity is central to economics and refers to the situation where the available resources are not sufficient to produce all the goods and services that people want or need. As a result, choices need to be made about how to allocate scarce resources among competing uses, and this creates the problem of resource allocation.