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Why does poverty exist in country with abundant resources?

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When you travel to South America, you encounter countries that have a vast amount of natural resources, and very large labor forces. However, despite of the abundance of these resources, you also see a lot of poverty. Can you provide an economic explanation of why poverty exists? (Hint: review the list of factors of production necessary to produce goods and services).

© BrainMass Inc. brainmass.com October 16, 2018, 10:16 am ad1c9bdddf - https://brainmass.com/economics/natural-resource-economics/why-does-poverty-exist-in-country-with-abundant-resources-93072

Solution Preview

The poverty exists because South America lack of certain factors of production. Factors of production are the resources of land, labor, capital, and enterprise used to produce goods and services. South America has a vast amount of land ...

Solution Summary

This solution discusses why poverty exist in country with abundant resources in 160 words.

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