What are economic resources, and how does scarcity of resources apply to economi

Question

What are economic resources, and how does scarcity of resources apply to economic decisions? Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster, Barnes & Noble, McDonald's, etc.). What motivated the producers of each of the products in the store to make these and offer for sale? How did the producers decide on the best combination of resources to use for producing each product? Who made those resources available, and why? How does the market determine who will get the goods and services? Who decides whether these particular products should continue to be produced and offered for sale? How do these decisions differ between capitalist and socialist systems?

Explanation / Answer

Economic resources also call the factors of production are classified as; land, labor, capital and entrepreneurship. These goods or services are used by people or businesses to produce consumable products or services.

The scarcity is the motivation of the study of economics, most of every economic resource is scarce, there is a limit amount of it, thats why the used of these has be done the best way posible.

The economic system that we know in US is a capitalist model governed by the laws of supply and demand. And those business (the supply) are offering the products that the people are asking for (the demand).

In this economic system the combination of resources is mainly based on the cost of those, and that cost is based on the scarcity of the resource. Of course there are several other factor that are taken in consideration at the production line, but the main issue is if the production can be sustainable, at least for the majority of the products.

Those resources are given, are the ones that the planet has, and they had been distributing along the year by the people.

Now the way the market works is the people that pay for the goods and services are the ones that get it, since the market is working by the demand and supply, these prices are determined by the market.

Since the demand is the one that dictates the market, the people that buys the products is the one that decides if the product will be consume, on the other hand the supply has to have the resources to produce it.

In the capitalism the market decides the products and services that want to be consume and the price is fix by the supply and demand, and the supply is incentive by making a profit for the produce of these goods and services. But in the socialist the decision of which product has to be produce are not made by the market and neither the price and in this system there is not a seeking of profit

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