- There are infinite wants but finite resources. There is scarcity. Therefore, in nearly all circumstances there is opportunity cost.
- In reality, nearly all goods/ services are economic goods not free goods e.g. air is no longer a free good because of the rising population, but 'clean' air is a free good.
Economic resources can be classified into 4 areas with payment for their use:
1. Land - goods like minerals, land itself, and all resources taken from the world... rent
2. Labour - potential workforce; but not just physical people, but their skills and ability too...wages
3. Capital - stock of goods used to make other goods or services e.g. machines, tools etc. *money as capital represents what the money is used to buy, not the money itself.... interest
4. Entreprise - risk takers prepared to work to bring the other three factors of production together. Entrepreneurs organise and make this happen, they are catalysts for action and different from ordinary workers... profit
Some resources are renewable e.g. fish stocks whilst others like oil are not.
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