We realize that there are limits to what we can afford to buy because we have limited amounts of money. What we often don't realize is that the amount of resources available in Australia and the world to satisfy our wants is also limited. We are forced to make choices about how we satisfy our wants. Because we can't have everything, we must choose what we will have and how much we will have. The economic problem forces us to make choices.
Since resources are scarce and valuable, we should make sure that we don't waste them. We need to decide which are the most important needs and wants to satisfy from our resources. We need to get the maximum amount of products from the resources that we use. In other words, we should choose efficient ways of using our resources.
How will we decide who owns resources and who will be allowed to use them? In Australia, land resources are owned by governments unless they have been sold to private owners.
People using government - owned resources, such as pastoralists, foresters, miners and fisherman pay for their use through leases, licenses and royalties.
Labour and enterprise belong to the individual person who provides them and the person is paid for sharing their resources with others. Capital belongs to the people who have paid for it and may be in private or government hands.
The use of resources is controlled by the owners but is limited by laws. For example, there are many regulations that apply to how farmers use land they own. They must obtain a permit before clearing natural vegetation and have to control certain pests and diseases. In the same way, a factory owner must abide by laws about noise and pollution coming from their property.