which of the following is not typically considered to be a "limited resource"

Question

Economists note that although wants are unlimited, scarce resources limit how much can be produced. Within this context, which of the following is not typically considered to be a "limited resource" (i.e. scarce factor of production). 

A. physical capital

B. financial capital

C. land

D. labor

 

Answer 1

Hello Simon. In the context of the question, financial capital is not always considered to be a limiting resource. This is because financial capital, such as investments or money, is not directly utilized in the production process. On the other hand, physical capital(machinery, equipment), land, and labor are all directly utilized to produce a good and the quantity one has, directly impacts production choices

So the answer is B in this case

Answer 2

Land sort of used to be, back when there was so much of it compared to small populations, so that you could homestead for free.

but today that's far from true. You might find some free land in antarctica or Siberia, but you have to exercise some labor just to make it habitable.

Physical capital is definitely limited.

Labor is limited, but fairly cheap in countries using slave labor for free. Slave auctions though still charge money.

Financial capital is limited, but maybe what this question is referring to is the unlimited quantity of currency that a government can print. They don't even have to print large quantities, they just issue larger denominations. Zambia or a nearby country has trillion dollar notes, which is the Ig Nobel Prize amount rewarded to the ignoble recipient for his or her ridiculous research. Ridiculous research might be free and in unlimited quantities.

Usually "air" is given as a free unlimited resource, although fresh air is getting more limited. Still you can breathe without having to buy the air, short of oxygen tanks if you have respiratory problems.

Another example sometimes given of a free or unlimited resource is tumbleweeds, blowing around in the desert. You can pick one up for free. There's far more tumbleweeds than the quantity demanded at zero price. That's sort of a physical resource.