Scarcity

Economics is the study of scarcity- the study of the allocation of scarce resources to satisfy human wants.People's material wants, for the most part,are unlimited. Output, on the other hand, is limited by the state of technology and the quantity and quality of the economics resources. Thus, the production of each goods and services involves cost.A good is defined as a physical item such as a book or a car, and a service is something provided to you such as insurance.

Scarcity is a fundemental problem for every society on this planet. Decisions must be made regarding what needed to be produece, how to produce and whom to produce.

-What to be produce involves decisions about the kinds and quantity of goods and services

-How to produce requires decisions about what techniques to use and how economic resources(or factors of production) are to be combined in producing output. The economic resources used to produce goods and services are :

- Land. The economy's natural resources-such as land,trees and minerals

Labour. The mental and physical skills of individualist in a society.

Capital. Goods such as tools,machinery,factories used in production or to facilitate production.

-To Whom to produces involves decisions on the distribution of output among members of a society.

These decisions trigger opportunity cost.