What is scarcity of economic resources? What are the relevant economic concepts and examples?

Resources available in the economy are limited and they can be used for multiple purposes while wants of the users of resources are unlimited. These properties of economic resources make them scarce.

Economic concepts find the optimal ways for the interaction of scarce resources with the unlimited wants in such that way that social welfare is maximized. Economic concepts answer the question like what to produce, how to produce and for whom to produce. For example, a producer can use either labor intensive techniques or capital intensive techniques for production so a firm will make choice depending upon the cost involved in both the methods and also compare with the revenue they will earn. This problem comes under the concept of how to produce.

Opportunity cost is another economic concept which measures the cost of alternative foregone by using the resources in some other way. For example if a sum of money is invested in share market instead of depositing the funds in the saving account than the opportunity cost of money is the saving bank interest rate foregone.