Resources
Resources (also called factors of production) are the inputs required to produce goods and services. The four main categories are land (natural resources), labour (human effort), capital (machinery and buildings), and entrepreneurship (organising other resources). Scarcity of resources creates the fundamental economic problem.
Real World
The global shortage of lithium — a key input for electric vehicle batteries — has driven prices up 400% between 2021 and 2022, illustrating how scarcity of a natural resource directly affects production costs for companies like Tesla.
Exam Focus
Remember all four factors of production (land, labour, capital, enterprise) and their respective returns (rent, wages, interest, profit).
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