Economizing problem is at the heart of economics. Some of the economizing problems are as follow:
- Economics wants are unlimited
- Economic resources are limited.
- Wants of citizens of a society.
- Wants are desires of consumers to obtain and use goods and services to obtain utility-satisfaction.
- Wants range from basic necessities to luxuries.
- Some wants have biological roots while other are based on culture.
- Satisfaction of one want leads to development of another.
- Services are also required by society.
- Government and businesses have their own desires.
- Desires of an individual can be limited but overall wants are unlimited.
Types of Resources
There are major four types of resources for property and human resources needed for production of goods and services.
Land is the natural resource. Land refers to all the gifts of nature for example forest, minerals and oil deposit.
Capital is the manufactured resource. Capital refers to all the manufactured aids used in producing consumers good for example tools, machinery and distribution facilities.
Labor is the human resource and labor is considered as physical and mental talent of people.
Entrepreneur is considered as the human resource. Entrepreneur is one who takes risk. He is one who makes non routine decisions. He is an innovator. He is the person who takes initiatives. And he is the risk bearer.
Natural, human and manufactured resources are called economic resources.
Economics: Employment and Efficiency
Economics is efficient use of limited resources to satisfy unlimited wants. Efficient means doing the best with what we have. Efficiency embodies are full employment and full production.
Full employment means using all the available resources. Here the word available is focused because some labor like children and old age will not allow to work.
Full production means producing right mix of goods and sources at least cost. Full production is of two types.
Producing goods and services at least cost.
Producing that mix of goods and services most needed by the society.
February 14, 2019