a) Scarcity

a) The problem of scarcity - where there are unlimited wants and finite resources

b) The distinction between renewable and non-renewable resources

The basic economic problem (the problem of scarcity) = there are infinite human wants and needs and a finite number of resources to satisfy this, so resources are scarce

• Factors of production = the scarce resources consumed by humans

• Scarce resources = in an insufficient supply for its demand

• The more scarce = the higher the price

• Resources = either renewable or non-renewable

  • Renewable resource = replenished at the same rate or faster than they are consumed

  • Non-renewable resource = are consumed faster than they are replenished