a) Scarcity

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

b) the distinction between renewable and non-renewable resources

basic economic problem = there are infinite human wants and needs and a finite number of resources to satisfy them, so resources are scarce

• scarce resources = resources that are in an insufficient supply for their demand

• the more scarce the resource required to produce a good or service → the higher the price of the good or service

• resources are either renewable or non-renewable

  • renewable resources = resources that are replenished at the same or a faster rate than they are consumed

  • non-renewable resources = resources that are consumed at a faster rate than they are replenished