Economic Resources and the Economic Problem

What are Economic Resources?

Economics resources used in the production of goods and servicesEconomic resources are the inputs into the production process for an economy.

Economists think deeper and wider than accountants and not just in financial terms.

In contrast, accountants analyse and report things that can be measured in numerical form (quantified).

Economists look at all the items and conditions required to produce a product. So for example to grow coffee beans, a producer needs a warm climate and a suitable geography. Economists would say these resources are of the land category.

The types of resources in economic language are grouped into land, labour and capital.

Economics is essentially a study of scarcity and how to make ‘best’ choices regarding the use of scarce resources.

All resources are finite (limited) and all resources have competing uses. So economics is about making the best choices for the use of scarce resources to optimise the benefits to society. This is called the Economic Problem.

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