SECTION 1: BASIC ECONOMIC PROBLEM
- Scarcity is a situation where there is not enough to completely satisfies everyone’s wants. Scarcity arises because wants are unlimited whereas resources are finite.
- The economics problem arises because of scarcity. There is no limit to people’s wants; they are infinite. When unlimited wants exceed scarce resources, the economic problem arises.
- Factors of production are those resources needed to produce goods and services. There are four factors of production (land, labour, capital and enterprise) and they are in limited supply.
- Land is everything on below or above the surface of the soil; it includes coal, oil, grass, forests. Land is the gift of nature available for production. Most of the land is occupationally mobile, that means that it can be used for a number of purposes. Land is geographically immobile .For example: it is…