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Economic resources are the assets that a country has available to produce
goods and services to meet the needs of society. These resources are often referred to as the factors of production and include:
• Land – includes all the natural physical resources, examples. oil and gas deposits
• Labour – refers to the stock of labour in an economy
• Capital – refers to fixed and working capital and infrastructure
• Enterprise – the skills of the entrepreneurs who use factors to produce goods and services
The term scarcity refers to the fact that there are not enough resources to satisfy the wants of the population and therefore choices must be made.
Economic efficiency is a situation where individuals and firms get maximum satisfaction or benefit from these scarce resources. Candidates may refer to one or more of the different types of efficiency which include:
• Allocative efficiency: which is achieved when the cost of producing a good is equal to the value consumers place on that good, which is reflected in the price they are willing to pay.
• Productive efficiency: this is achieved when production takes place at the lowest possible average cost.
• Pareto efficiency: which is achieved when, it is impossible to make someone better off without making someone else worse off.
lydiajane74 answered the question on July 4, 2018 at 09:23
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