Economic resources Essay Example | Topics and Well Written Essays - 1500 words

Economic resources - Essay Example These core resources serve all living beings by producing a variety of useful goods and services. Few examples are food (produced by plants and other agriculture crops), medicinal plants, transportation media, breathing air, picturesque views, oils, minerals etc from earth's mantle etc. IN-APPROPRIABLE RESOURCES that are used free of price and are costly to the society of living beings. They result in EXTERNINALITIES i.e. situations in which production or consumption imposes uncompensated benefits or costs on other living beings. MECHANISM is a system of controlled interactions of various inputs to produce useful outputs. Mechanism, as applied to PRICE can be understood as a system of interactive processes between needs of prospective consumers and prevailing /possible future market trends. Price mechanism, also called market mechanism is the basis to decide/determine resource allocation, types, quantity, quality of goods and services to be produced. Human wants and desires do not have any boundaries, once their basic needs of FOOD, CLOTHING and SHELTER are fulfilled. Wants/desires appear to be needs depending on the living environment. They are continually dynamic without any limits and influence the trends of market supply and demand chain configurations. Prices are agreed expressions of the value of products/services for exchange and every society that allows exchanges has prices. Inter relation of individual prices results in the existence of a price system. A variety of economic forces bind the prices to form a price structure. Price mechanism is a means to organize an economic activity by meaningfully linking the decisions of consumers, producers and holders of productive resources across the globe. In the modern economy, it enables economic agents to meet