Question

Consider the following statements:

Statement 1: Resources or factors of production can be natural, human, capital, and entrepreneurial.

Statement 2: An economy must make a choice of the wants which are important for the economy.

Options

• Both statements are true.

• Both statements are false.

• Statement (1) is only true.

• Statement (2) is only true.

Answer 1

Both statements are true.

Explanation:

Natural resources (land), human resources (labour), capital resources (machines), and entrepreneurship are all in short supply. To answer the question of "how to produce," an economy must select the wants that are important to the economy. Even though the two statements are unrelated, they are both correct.