A constraint of critical importance for most people is wealth, or income-two alternative ways of describing a person’s command over material resources. Many choices are significantly affected by wealth, either the individual’s or the family’s, and there are other important resource constraints as well. Even the wealthiest person’s behavior is limited by the fact that there are only twenty-four hours in a day-that is, by the constraint of time (Becker 1965; Linder 1970). The analysis of choice within a framework of constraints is what economics is all about.
The economic perspective assumes that resources are scarce relative to human wants, that these resources have alternative uses, and that people have diverse wants, not all of which can be satisfied. It follows that the basic economic problem of every society, and of every individual, is to allocate resources so as to best satisfy wants.