ESSAY ABOUT HOW THE BASIC ECONOMIC PROBLEM HAS BEEN SOLVED
The basic economic problem is the allocation of scare resources amongst competing uses to satisfy unlimited wants.Knowing this we have to discuss this question talking about the four factors of production which are in the power point as we can see, then answer: how was solved the basic economic problem in the land(use of land including natural resources), in the labour (the use of people and their physical and mental skills, experience and knowledge to produce the product), in the capital goods (the use ofmachinery by a firm to produce a product which is added to through investment) and then in the enterprises (risk and reward is organizing the other factors of productions).
Land: Starting with thisfactor, as we can see in the graphics the use of land has increased in the last 20 years respect from 50 years ago (down). Therefore we’ve got more natural resources and this means a higher production,the price drops and then more people will satisfy their wants. At first glance it seems the best resolution to the basic economic problem but in fact, there are more problems that born from the higheruse of land as loss forests, the pollution of the earth caused by an increasing of factory waste, and increasing too of CO2 emissions to the atmosphere creating variations in global near-surface landtemperature, etc.
Between 1993 and 1997 (brown marks) the use of land increased considerably from the first three years of the sixties (green marks).
Labour: the most important part of thissecond factor is the use of people, so I’m going to talk about what has been and what will be the production’s reaction due the increasing of world population. The economy depends on people so if there isa growing population, the production should increase because a higher demand and the scare resources will be needed in a higher quantity too, then the product’s price will be rised. The thing is...
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