What of the constraints in making good choices, economically speaking? There are a few, specifically regarding resources, technology, time and moreover there is the issue of opportunity cost.
There is a limit to everything. Because of this there is the issue of how we choose in regards to restraints. One very big tree can yield paper or firewood but it cannot yield both. It's choosing that is a conundrum. We examine the constraints below.
Resources
There are limits to natural resources. Natural things like oil and fresh water are easy to grasp. Prices and the market determine generally the value of these items. In a capitalist society control of these resources usually goes to the higher bidder. The downside is that the poor are kept from the bidding because of another constraint: money.
Is this all bad? Not really, after all there is a value assigned to this resource and having market forces involved helps to insure that the people who value this limited resource the most are also the people who control it.
Technology
There isn't any more aluminum today than there was 2,000 years ago. Ditto for fresh water. What makes life so grand today is that we have had wonderful innovations in the way we use raw resources. We have accomplished more in the last 60 years than we did in the previous 200. Technological growth is exponential in it's benefits. A great revolution makes other revolutions possible. When I was a child I used to dream of a video phone and a few companies actually made such a thing possible. The problem was cost. The internet and the rise of the personal computer have made the video phone possible and at a cheap cost. This happened not because there was decision to make a better video phone but because the technology caught up to our desire. That's a downside, you have to make do with what you have.
The good news is that as technology improves we are able to have more choices but sometimes technology has to catch up. If you want a videophone just wait, it will happen......someday.
Time
Here's a limitation we can all relate to: time. This doesn't take a whole lot of explanation because, as you are well aware, you cannot be in two places at once.
Opportunity Cost
Opportunity Cost is closely related to the time limitation discussed above. You can only do one thing at a time and because of that a value has to be established. Yes, you have to give up things sometimes.
When evaluating an opportunity cost you are really only evaluating two things: what you are doing and the other thing you could be doing, which is to say the next best thing. You could be doing one thing when you could be doing 1,000 other things, but the idea is still the same. There is the thing you are doing and the best choice from the 1,000 things that you could be doing. When you make that choice the other 999 things are discarded.
This morning I had a choice of surfing the internet or balancing my checkbook. I chose to surf the internet because I like doing that better (and who doesn't enjoy the surfing the internet more than balancing one's checkbook?). In my mind I know that balancing my checkbook was more important so the opportunity cost of surfing the internet was not balancing my checkbook which I still have not done (psychologists would have a field day with this one; it's called suppression).
I like key lime pie. I also like Rocky Road Ice Cream and it's my favorite ice cream. If you offer me key lime pie I'll eat it (no problem!) but if you offer me a choice of key lime pie or Rocky Road Ice Cream, I'll take the Rocky Road every time.
This was an opportunity cost as well. I chose the key lime pie's opportunity cost is lower than the benefit of Rocky Road Ice Cream.
Note: There are several types of Rocky Road Ice Cream