Krugman's Economics For The Ap® Course
Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
Question
Book Icon
Chapter 1, Problem 1FRQ
To determine

The resources and their categories along with the characteristic of resources which forces the producer to make choices.

Expert Solution & Answer
Check Mark

Explanation of Solution

Resources are something that can be used in producing other goods and services. They can be used in producing both final goods and intermediate goods. Resources are also known as the factors of production.

Resources or factors of production can be classified into four categories:

  1. Land: Piece of land including timber, water, and other natural resources<
  2. Labor: Skilled or semi-skilled workers<
  3. Capital: Machinery, tools, and buildings<
  4. Entrepreneurship: Strategies and innovation

Resources are limited in quantity terms. As every resource including natural and man-made is exhaustive, if producers keep using them continuously, these resources will exhaust one day. The number of skilled workers, machinery, piece of land for factories, raw materials, and production permits is a few examples of scarce resources. Therefore, making choices is necessary for better utilization of these limited resources to get optimum output.

So, scarcity is the main characteristic of resources which results in the need to make choices. 

Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education