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Questions and Answers
In economics, what is a resource?
Why does economics usually deal with problems from the point of view of a society rather than an individual?
What does the economic problem of scarcity entail?
How are wants related to scarcity in economics?
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Why do basic wants such as food, water, and clothing take priority over other wants?
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Which factor of production includes minerals, soil, and fish?
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What determines the quality of labor in the production process?
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Which factor of production includes machinery, computers, and office furniture?
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Who undertakes the task of organizing the other factors of production effectively and is willing to take a risk?
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Why is scarcity considered a relative concept?
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Study Notes
Economics Basics
- In economics, a resource is a factor that is used to produce goods and services.
Economic Perspective
- Economics usually deals with problems from the point of view of a society rather than an individual because it studies how to allocate resources to meet the needs of a group of people.
Scarcity
- The economic problem of scarcity entails that the needs and wants of individuals are unlimited, but the resources available to satisfy them are limited.
- Scarcity means that the basic needs of individuals cannot be met fully, leading to a situation where choices have to be made about how to allocate resources.
Wants and Scarcity
- Wants are related to scarcity in economics because they are unlimited and competitive, which means that they cannot be satisfied simultaneously due to the limited availability of resources.
- The unlimited nature of wants leads to competition for resources, which in turn leads to scarcity.
Priority of Wants
- Basic wants such as food, water, and clothing take priority over other wants because they are essential for survival and are considered more important than other wants.
Factors of Production
- Natural resources, such as minerals, soil, and fish, are a factor of production.
- Human resources, including labor, determine the quality of labor in the production process.
- Capital resources, including machinery, computers, and office furniture, are another factor of production.
- Entrepreneurship, which involves undertaking the task of organizing the other factors of production effectively and being willing to take a risk, is also a factor of production.
Scarcity as a Relative Concept
- Scarcity is considered a relative concept because it depends on the availability of resources and the wants of individuals in a particular society.
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Description
This quiz covers the fundamental concepts of economics including scarcity, resource allocation, and the societal perspective in addressing economic problems. It explores how economics studies the utilization of limited resources to meet unlimited human wants.
