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Chapter 02 Terms 101 - Scarcity Scarcity is a situation in...

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Scarcity: Scarcity is a situation in which the ingredients for producing the things that people desire are insufficient to satisfy all wants. It exists in all societies and at all income levels because human wants exceed what can be produced with the limited resources and time that nature makes available. Factors of Production: Land, Labor, Capital & Entrepreneurship. Land: Land is often called the natural resource and consists of all the gifts of nature. It consists of physical land and all the mineral resources on the land. Labor: Labor is the human resource that includes all productive contributions made by individuals who work involving both mental and physical activities Physical Capital: Capital is all manufactured resources that are used for production. (The machines that produce our consumer goods.) Human Capital: The accumulated training and education workers receive that increases their productivity.
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