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 states that there are infinite human wants and needs and a finite number of resources to satisfy this, so resources are scarce

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

• the more scarce a resource required to produce a product, the higher the price of the product

• resources are either renewable or non-renewable

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

  • non-renewable resource are consumed at a faster rate than they are replenished