Basic Problems of an Economy — Chapter Summary

An economic problem generally means

An economic problem generally means the problem of making choices that occurs because of the scarcity of resources. Human wants are unlimited, but res

Scarcity refers to a situation where

Scarcity refers to a situation where only a limited amount of resources exists, so only a limited amount of goods can be produced. If resources were u

What to produce and in what

What to produce and in what quantities, how to produce, and for whom to produce are the three central problems. They are common to every kind of econo

Unlimited wants

Unlimited wants, limited resources, and resources having alternative uses create the economic problem. Human wants are recurring in nature and must be

Land

Land, labour, capital, and enterprise are called factors of production. They are the basic resources used to produce goods and services.