You are a producer who is hoping to create a specific good. Based on what you have learned about resources and scarcity, what factors do you need to consider when producing this good?Give your answer in the form of three to four complete sentences.

Answer:

I need to consider the availability of natural resources, labor, capital, and entrepreneurship needed to produce the good. Because resources are scarce, I must consider their cost and whether they have other possible uses. I should compare scarce resources with less scarce substitutes and decide how the choice will affect the good’s quality, value, and production cost. I also need to consider the opportunity cost of using resources to produce this good instead of another good.