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INCENTIVE: A cost or benefit that motivates a decision or action by consumers, businesses, or other participants in the economy. Some incentives are explicitly created by government policies to achieve a desired end or they can just be part of the wacky world we call economics. The most noted incentive in the study of economics is that provided by prices. When prices are higher buyers have the "incentive" to buy less and sellers have the "incentive" to sell more. Price incentives play a fundamental role in the . When prices are higher buyers have the "incentive" to buy less and sellers have the "incentive" to sell more. Price incentives play a fundamental role in the allocation. When prices are higher buyers have the "incentive" to buy less and sellers have the "incentive" to sell more. Price incentives play a fundamental role in the allocation system that society uses to answer the three questions of allocation.
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                           ECONOMIC RESOURCE: A resource with an available quantity less than its desired use. Economic, or scarce, resources are also called factors of production and generally classified as either labor, capital, land, or entrepreneurship. Economic resources are the workers, equipment, raw materials, and organizers that are used to produce economic goods. Like the more general society-wide condition of scarcity, a given resource falls into the economic or scarce category because of it has a limited availability relative to (potentially unlimited) productive uses. Adding the word "economic" before the word "resource" signifies that a resource has limited availability relatively to desired use and is thus subject to economic analysis. An economic resource is typically exchanged through a market. Buyers pay a price to obtain the resource and sellers give up the resource in exchange for payment.ScarcityLike many economic concepts, an economic resource can be traced to the fundamental problem of scarcity. Scarcity is the widespread condition of limited resources and unlimited wants and needs. An economic resource is more specifically a resource with limited availability relative to desired use. The two concepts are closely related. Scarcity is the general problem underlying the study of economics and an economic resource is a specific resource that reflects this general scarcity condition.The contrasting notion to an economic, or scarce, resource is a free resource. A free resource is one that is plentiful enough to satisfy all desires uses, often with some left over. Market ExchangesBecause limited availability means that an economic resource has more uses than it can meet, it is generally exchanged through a market. The market price serves to allocate the resource to its most satisfying and valuable use. Users gaining the greatest benefit from the economic resource are willing to pay the highest price and can thus out bid other potential users to gain control. Moreover, payment received by those who have control of the economic resource compensates for the opportunity cost of foregone alternatives.Economic GoodThe word "economic" is also added to the word "good" to reflect a similar concept. The difference is that an economic resource is used to produce an economic good. The resource is transformed or used for production and the good is then used to provide satisfaction. However, in both cases the item is limited relative to the desired use.Factors of ProductionAnother, more common, name for economic resources is factors of production--labor, capital, land, and entrepreneurship. Labor includes the mental and physical human efforts. Capital includes machinery, equipment, buildings, and structures. Land includes naturally occurring raw materials. Entrepreneurship includes the risking-taking organizers of production.
Recommended Citation:ECONOMIC RESOURCE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: January 31, 2023].
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Approximately three-fourths of the U.S. paper currency in circular contains traces of cocaine.
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"To understand a man, you must know his memories. The same is true of a nation." -- Anthony Quayle, Actor
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EOE
European Options Exchange
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