What is the foundational assumption in economics regarding resources?

The foundational assumption in economics regarding resources is scarcity. This concept suggests that resources are limited in supply while human wants and needs are virtually limitless. Scarcity implies that societies must make choices about how to allocate their finite resources to meet various demands.

In the context of economics, this foundational idea leads to the necessity of prioritizing which goods and services to produce, how to produce them, and who will receive them. When resources are scarce, individuals, firms, and governments must consider trade-offs—what they forgo when they choose one option over another. This trade-off aspect is central to understanding economic decision-making and the allocation of resources efficiently.

The other options do not capture this basic economic principle. Abundance would imply that resources are plentiful, which contradicts the core idea of scarcity. Overproduction and surplus suggest situations where supply exceeds demand, which are effects that can arise from various economic conditions, but they do not reflect the fundamental assumption of resource allocation in economics.