Scarcity and the Factors of Production

What is the difference between a shortage and scarcity?

A shortage can be temporary or long-term, but scarcity always exists.

Shortage

A situation that occurs when a producer cannot offer a particular good or service at the current price.

Goods

Physical objects such as baseballs or umbrellas

Labor

The effort that a person devotes to a task, for which the person is paid

Economics

The study of how people make decisions to satisfy their needs and wants

Which of the following is an entrepreneur?

a person who starts an all-organic cleaning supplies business that employs others

What does an economist mean by the term "land"?

all natural resources used to produce goods and services.

Which of the following is an example of using physical capital to save time and money?

building extra space in a factory to simplify production

Which of the following are factors of production?

capital and land

To what part of an industry does a worker's education contribute?

human capital