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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17

Oct'18

What are Resources in Economics

What are Resources in Economics? Resources in economics are the inputs into the production process. Accountants analyse and report costs and benefits to the business that are measured in number form or quantified. Economists consider quantifiable and unquantifiable costs and benefits. For example, to grow coffee, a producer needs a warm …

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19

Mar'18

What is Demand and Supply?

What is Demand and Supply? Demand and supply is a fundamental concept in economics. In a market, the forces of demand and supply interact to create the ‘price mechanism‘. This is the way a market economy works. Demand comes from the buying (consumer) side of a market, whilst supply is …

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