![]() ![]() As such, it is a social science because it deals with the behavior of people as they deal with this basic issue. The Scope of EconomicsĮconomics is the study of human efforts to satisfy what appear to be unlimited and competing wants through the careful use of relatively scarce resources. Finally, entrepreneurs are needed to organize the other three factors and make sure that everything gets done. Land, such as the iron ore, granite, and timber used to make the building and desks, as well as the land where the school is located, is also needed. The labor is in the form of services supplied by teachers, administrators, and other employees. For example, the chalkboards, desks, and audiovisual equipment used in schools are capital goods. In fact, everything we produce requires these factors. When all factors of production-land, capital, labor, and entrepreneurs-are present, production, or the process of creating goods and services, can take place. They provide the initiative that combines the resources of land, labor, and capital into new products. Entrepreneurs often are thought of as being the driving force in an economy because they exhibit the ability to start new businesses or bring new products to market. Such an individual is an entrepreneur, a risk-taker in search of profits who does something new with existing resources. Some people are special because they are the innovators responsible for much of the change in our economy. Historically, factors such as population growth, immigration, famine, war, and disease have had a dramatic impact on both the quantity and quality of labor. Unlike land, labor is a resource that may vary in size over time. ![]() This category includes all people except for a unique group of individuals called entrepreneurs, which we single out because of their special role in the economy. ![]() LaborĪ third factor of production is labor-people with all their efforts, abilities, and skills. Like the bulldozer, the cash register in a neighborhood store is a capital good, as are the computers in your school that are used to produce the service of education. It also was built in a factory, which makes it the result of earlier production. A bulldozer, for example, is a capital good used in construction. Capital is unique in that it is the result of production. Entrepreneurs are individuals who start a new business or bring a product to market. ![]()
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