Introduction to Economics - Relative Scarcity | en - 199 - 19639
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Module 1: Introduction to Economics

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Relative Scarcity

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Economics - Relative Scarcity

Relative Scarcity

Human wants for goods and services can never be fully satisfied because
the resources, also known as the factors of production or inputs in the
production process, are limited.

Wants are the material desires of individuals and groups of people that
stimulate economic activity as producers try to satisfy the wants.

Goods are the tangible (visible) output of the production process. Some
goods are made into something else, such as flour that the baker transforms
into bread, and are known as intermediate goods. Final goods, on the other
hand, are the end result of the production process and are not transformed
into anything else.

Services are the intangible (invisible) output of the production process,
including plumbing, transport and education.

Resources are the factors of production that are combined to produce goods
and services, and they can be divided into four main categories. Natural
resources like fertile soil, water, trees and minerals that can be used as
inputs in the production process are classified as land.

Capital refers to manufactured elements of production, such as machinery
and buildings, used to produce other goods and services. The government
produces capital on a large scale to help private businesses operate
efficiently. This is known as infrastructure [1] or social overhead
capital, and includes public transport, public hospitals, roads and railway
lines. The human effort in the production process is termed labour.

A special labour skill that is sometimes classified as a resource is the
ability to combine the resources in a way that produces goods and services.
This management skill is called enterprise.

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[1] http://alison.com/#

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