RESOURCES

RESOURCES

• Resources = what is needed to produce goods and services

• Economic resources are the factors used in producing goods or providing services.

• In other words, they are the inputs that are used to create things or help you provide services.

RESOURCES

• FOUR TYPES OF RESOURCES1. Land

2. Labor

3. Capital

4. Entrepreneurship

LAND

• Land includes all natural physical resources like gold, iron, silver, oil etc

• Some countries have very rich natural resources and by utilizing these resources they enrich their economy to the peak.

• The economy of many countries is based on their natural resources

• The amount of natural resources available to a society has a direct effect on its economy.

LABOUR

The human input in the production or manufacturing process is known as labor.. Workers have different work capacity The work capacity of each worker is based on his own training, education and work experience. Labor can be skilled or unskilled, physical or intellectual.

One of the biggest problems facing many nations today is not a shortage of labor but a shortage of skilled labor

LABOUR

To achieve the economic growth the raise in the quality and size of

workforce is very essential.

CAPITAL

• Capital resources are the things used to produce goods and services, like buildings, materials, and equipment.

• As the wants and needs of people change, so do the needs for capital resources.

• Following are the factors of capital: Fixed Capital: It includes new technologies, factories, buildings, machinery and other equipments. Working Capital: It is the stock of finished goods or components or semi-finished goods or components

ENTREPRENEURSHIP

• The Entrepreneurship is person or individual who wants to supply the product to the market to make profit.

ENTREPRENEURSHIP

• Why it is required?

• Meeting the changing wants and needs of people requires entrepreneurial resources.

• Entrepreneurs improve on ways to use resources, or create and produce new ones.

SCARCITY

Scarcity

Limited quantities of resources to meet the unlimited wants.

It occurs when we do not have resources to produce all the things we would like to have.

No country have all the resources it needs……..the result is scarcity.

SCARCITY

• What does it means?• Your wants are pretty much unlimited.

• All resources, goods, and services are limited, however.

• This means it’s impossible for all the wants to be met.

SCARCITY

• Here we need economics….to solve the problem.

• What to produce• How to produce• For whom to produce

SCARCITY

• Scarcity forces us to make a choices as society.• Society must decide.• What goods and services to produce.• How these goods and services will be produce.• Who should receive these goods and services.

TRADE -OFF

• Trade off is when one thing is given up in order to get another.

• Example• A government decides whether to spend

money more on education or more on defense.

• Hospital decides whether to build a gym for doctors & staff or to build a new canteen.

OPPORTUNITY COST

• Making a choice…..any choice always has some cost.

Understanding Opportunity Cost

We make choices every day. We have to, as we have limited resrouces but so many wants.

We therefore have to decide which wants we will satisfy and those we will not.

All choices involve giving something up is called Opportunity Cost.

What is Opportunity Cost?

Opportunity Cost is the cost of a decision in terms of the best alternative given up to

achieve it. It is the best alternative forgone.

Economic Goods

This mean that it takes resources to produce them and hence, their production involves an opportunity cost. They are limited in supply. Almost every good and service is economic good.

OPPORTUNITY COST

• So every time you make an economic choice ,• There is an opportunity cost to you in terms of

what you had to give up/ trade off• opportunity cost are fundamental cost in

economics, such cost are not recorded in account books but are recognized in decision making. thus resulting in profit or loss.