Scarcity Scarcity and Economic Systems

Term Definition
scarcity the fundamental economic problem of having unlimited human wants in a world of limited resources.
services actions or activities that one person performs for another
factors of production land, labor, and capital are all factors of production.
labor the effort that a person devotes to a task for which they are paid
human capital knowledge and skills a worker gains through education and experience
goods physical objects such as shoes and shirts
shortage when producers will not or cannot offer goods or services at the current prices. This is not the same as scarcity.
land Economists use the word land to refer to all natural resources used to produce goods and services
physical capital human-made objects used to create other goods and services. Examples: buildings, tools, machinery

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