The sources of Economic problem

Resource sand scarcity:

This is the main source of the economic problem. we have limited resources and the means to satisfy those resources are very limited.

Here the resources of the society consists not only of the free gifts of the nature such as land, forests and minerals, but also of human capacity both mental and physical and of all sorts of man-made aids to further production, such as tools, machinery, building etc.

These resources can be divided into three main groups:

1. All those free gifts of nature, such as land, forests, minerals, etc. are commonly called as natural resources and known to economists as LAND.

2. All human resources, mental and physical, both inherited and acquired, which economists call LABOUR.

3. All those man-made aids to further production, such as tools, machinery, plants and equipments, including everything man-made which is not consumed for its own sake but is used in the process of making other goods and services, and which is known to economists as CAPITAL.

Economics help us in economizing our means. It helps us in understanding the problem and making the right decision so that its helpful for the organization for its further planning.