What concept is examined when deciding between two possible uses of resources?

The concept being examined when deciding between two possible uses of resources is opportunity cost. Opportunity cost refers to the value of the next best alternative that must be forgone when a choice is made. In economics, resources are typically scarce, meaning that choosing one option often means giving up another. For example, if you have a limited amount of money to spend, choosing to buy a new laptop means you cannot use that money to purchase a new phone. The opportunity cost here would be the benefits you would have gained from the phone, had you chosen to buy it instead.

Understanding opportunity cost is fundamental in making informed decisions about resource allocation, as it forces individuals and businesses to consider not just the benefits of the option they are choosing, but also what they are sacrificing in the process. This concept is critical in both personal finance and larger economic analysis, as it underpins the rationale behind many economic choices and policy decisions.