An economy has to decide how to use its scarce resources to attain the maximum possible satisfaction of the member of the society, this is what we meet our choice. The optimization objective of the economic actor (producer, consumer and government) necessities making knowledge choice in the use of available resource. Choice is in economic activities at both consumption and production level.

In economics, we suppose that a decision maker is rational/knowledgeable economic rationality of decision makers implies the following.

i. Making choice that will maximize benefits for themselves and minimize any cost.

ii. Having full or perfect information about alternatives; it also assumes they have the time.

iii. Rational decision making favors objective data and a formal process of analysis over subjectivity and intuition.

Choice are made in respect to solving these economics problems (I) Unlimited want (II) Limited resources. Because human wants are insatiable, and the resources to satisfy this wants are scarce/limited in supply. In making this possible, the economic actors (individual, firms and government) are to be rational in making choice.

INDIVIDUAL DECISION MAKING

Individual does make choice between one or alternative uses. In making choice, an individual is expected to make a scale of preference, which is the arrangement of needs in respect of their importance. After arrangement of needs in respect of their importance, a person is xpected tp use the available limited resources to satisfy those pressing needs. After these choices are made, the other needs that are left unsatisfied are the alternative forgone/ opportunity cost. This opportunity cost are left to satisfy the important needs of an individual.

FIRMS CHOICE MAKING

As a result of the limited available resources to satisfy the needs of firms (producer). Firms are left with no choice but seek foe alternative measures which result in providing the “production possibility frontier”. Which makes it easier for firms to choice among alternative uses.

GOVERNMENT CHOICE MAKING

The economy confronted with scarcity of resources also prompt the making of choice by using the production possibility curve. However, the available technology, personnel and physical resources determine the limitation for the economy. Based on this following the economy choice production are more like the firms for it must allocate resources among it products.
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