Economic Resources and Markets Quiz

Economic Resources and Markets

• Scarcity is the fundamental economic problem, where limited resources cannot meet unlimited wants.
• Economic resources are inputs used in production, like human labor, natural resources, capital goods, and entrepreneurship.
• Free resources are abundant, unlimited in supply, and have a zero price (e.g., air, sunlight).
• Scarce resources are in limited supply, and have non-zero prices (e.g., skilled labor, land).

Types of Resources and Factors of Payment

• Land is a natural resource; its payment is rent.
• Labor is human effort; its payment is wages.
• Capital are manufactured inputs; its payment is interest.
• Entrepreneurship combines the other factors; its payment is profit.

Renewable and Non-renewable Resources

• Renewable resources can be replenished naturally over time (e.g., sunlight, wind energy, water).
• Non-renewable resources are finite and cannot be replenished over time (e.g., fossil fuels, minerals).
• Conservation is crucial for sustainable use of all resources.

Types of Markets

• A market is an institution where buyers and sellers meet to exchange goods and services.
• Goods and services markets are where goods and services are bought and sold.
• Labor markets are where labor services are exchanged.
• Financial markets are where financial assets are bought and sold (e.g., stocks, bonds).

Circular Flow of Economic Activities

• The circular flow model illustrates the continuous flow of money and resources between households, firms, and the government.
• Real flows represent the movement of goods, services, and resources.
• Money flows represent the movement of money used for transactions.

Land as an Economic Resource in Ethiopia

• Land is a vital economic resource in Ethiopia, especially for agriculture.
• Two key soil types in Ethiopian highlands; Red-to-reddish brown soils and Brownish-to-grey and black soils are suitable for agriculture.
• Land rights and ownership have historically been complex issues in Ethiopia.

Test your knowledge on economic concepts related to resources and markets, including scarcity, types of resources, and factors of payment. This quiz will help you understand the distinctions between renewable and non-renewable resources as well.