Final answer:
Scarce resources encompass labor, land, capital, and entrepreneurship, which are all essential for producing goods and services and are represented by the four factors of production. Due to scarcity, these resources must be efficiently allocated, leading to a system that manages their distribution and use. The correct option is (e)
Step-by-step explanation:
Scarce resources include all elements necessary for the production of goods and services. Within this context, the four factors of production are labor, which signifies the human effort utilized in production; land, representing the natural resources; capital, meaning the equipment and structures needed; and entrepreneurship, which is the skill of combining these factors to create goods and services. Due to scarcity, producers must make decisions about how to allocate these limited resources efficiently to meet the population's wants, leading to an inherent opportunity cost.
An economic system is established to manage these decisions, encompassing the production, consumption, and distribution of goods and services. The circular flow model illustrates the interaction between factor markets (where resources are bought and sold) and product markets (where goods and services are bought and sold). Thus, when answering the question, scarce resources include labor, land, capital, and entrepreneurship, meaning that the correct response is e. All of the above.