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Economic resources

Economic resources. Resources. A lack of resources is called scarcity . The principle of scarcity states that there are limited resources for satisfying unlimited wants and needs.

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Economic resources

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  1. Economic resources

  2. Resources • A lack of resources is called scarcity. • The principle of scarcity states that there are limited resources for satisfying unlimited wants and needs. • Example-a restaurant owner may forgo plans for a costly new décor to have more money to put into kitchen equipment. • When dealing with scarcity, it is important to think of the best way to use the item that is in short supply.

  3. Factors of Production • Factors of production are all the economic resources necessary to produce a society’s goods and services, such as the wheat that grows in the ground, the tractor that harvests it, the labor that turns it into flour, and the distribution system that delivers it to the marketplace. • There are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources.

  4. Natural Resources • Natural Resources are raw materials from nature that are used to produce goods. Trees, water and grains. • The economy of many countries is primarily based on its natural resources. Latin American countries rely on their coffee and banana crops. • Renewable resources- natural resources that can be reproduced. Breed cattle. • Nonrenewable resources- limited resources. Coal, iron, and oil.

  5. Labor Resources • Labor resources are people who make the goods and services for which they are paid. • Teachers, coal miners, bank managers, and farm workers are all human resources.

  6. Capital Resources • Capital resources are not the same as capital, or money. • Capital resources are the things used to produce goods and services, such as buildings, materials and equipment. • They are also referred to as capital goods. • They include delivery trucks, supermarkets, cash registers, and medical supplies.

  7. Entrepreneurial Resources • Entrepreneurship is the process of recognizing a business opportunity, testing it in the market, and gathering the resources necessary to start and run a business. • Entrepreneurial resources are used by the people who recognize opportunities and start businesses. • Entrepreneurial resources are individuals who start and direct businesses to produce goods and services to satisfy needs or wants.

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