What Is the Basic Economic Problem?

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“What is the Basic Economic Problem?” The basic economic problem is scarcity. Scarcity means that economic resources are finite and can run out, if the right choices are not made. Scarcity occurs when we humans want a lot of money to satisfy our needs and wants; however, we only have a limited amount of money to spend. Scarcity also occurs as the human population is growing therefore we need more economic resources in order to provide for the needs and wants of our ever growing population. This is the basic problem, we have scarce resources but our wants are unlimited. We have economic resources such as land. Land is the first economic resource. This includes all natural resources such as soil to grow produce, minerals such as coal, oil and gold, the seas which includes fish stocks and the forests which provides wood such as timber. However, these resources are not finite if not renewed. Trees are renewable as they can be cut down and planted for it to grow again and provide more wood. The fields can also be given some time to fallow so that nutrients are restored. Crops can be harvested and grown in a sustainable cycle. However, these renewable resources need more time as they take time to grow trees, fallow the fields etc. This means that within a certain period of time, these resources are limited. Examples of finite land resources are coal, oil and natural gas. This is because they can never be replaced. The second economic resource is labour. Labour is the people of working age that contributes to the economy. The amount that they can provide is limited in a given time period as the amount of workers available and also the skills possessed by the workers can contribute to the amount of produce given by labour. As time goes by, the quantity and the quality of labour can increase. This can happen through better education and training of workers
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