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3. Run Out
Land, labor, and capital also are known as factors of Production.
Factors of production help in the production of goods and services to convert raw materials into finished goods. There are 4 of them including land, labor, capital, and entrepreneurship.
Economies must answer the three economic questions because resources are Limited.
There are 3 fundamental economic questions that should be answered before goods and services are produced so that the economy in question can be able to prioritize. These questions are; What to Produce, How, and for Whom?
If an economy does not answer the three economic questions, resources may Run Out.
As the economy has scarce resources, the aforementioned questions should be used to prioritize ventures in such a way that the resources that are available are channelled towards the most efficient of those ventures otherwise the resources might run out.
Negative Consequences can result when an economy does not answer the three economic questions .
If the economy fails to answer the questions, there will be negative consequences as resources will become scarce and the economy will suffer because production will reduce and the people in the economy become worse off as a result.
Land, labor, and capital also are known as factors of.
The three questions must be answered because the resources are prone to scarcity. Most of the resources are not easily replenished and some can never be replenished on their own. This is why carefully conducting research and answering the questions can prevent a resource from going extinct. For example, buffaloes were a resource for production in the United States however too much hunting cased the business to eventually fall apart due to the lack of buffaloes who became almost extinct. This happened because the questions were not answered.
If the economy doesn't answer them, resources may dwindle which can completely ruin not only the branch of production but also the country's economy or even bring harm to the world. For example, deforestation has to be done carefully in order to make sure that timber grows back. Too much deforestation ruins the entire ecosystem by making land bad and by reducing the amount of oxygen in the air which can have severe consequences. Such things may happen in any sphere of resource exploitation.
The consequences are dire and as i mentioned before can ruin many things. For example, oil is constantly being used and oil is not replenished after it's removed from the ground. Since usage of fossil fuels ruins the atmosphere, people should be more careful with its exploitation and refinement and usage, that is, the answers should be provided as to what is needed, for whom it is needed, and how should the need be managed. This is why many countries are switching to solar and wind power because this is not a resource that can be depleted.
The three basic economics question that must be answered are:What goods and services will be produced?How will the goods and service will be produced?Who will consume the goods and services?
Every society must answer these three question in order to meet the needs of its people. Every society answer these 3 basic questions differently, but each encounters the same fundamental problems, that are resourcea allocation and scarcity.