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Economic Resources
- FACTORS OF PRODUCTION
- 1. LAND
- the natural resources we take from the world
- Examples: fish, forestry, air, minerals, land
- reward= RENT
- the natural resources we take from the world
- 2. LABOUR
- All the potential work force including the physical
people and their skills, ability and intelligence
- reward= WAGES
- All the potential work force including the physical
people and their skills, ability and intelligence
- 3. CAPITAL
- The stock of goods used
to make other goods and
services (capital goods)
- Examples: machines,
tools, computers, roads,
railways, buildings
- Reward= INTEREST
- The stock of goods used
to make other goods and
services (capital goods)
- 4. ENTERPRISE
- Risk takers who are
prepared to work to bring
factors 1-3 together to
make goods and
services
- (business manager, entrepreneur)
- reward= PROFIT
- Risk takers who are
prepared to work to bring
factors 1-3 together to
make goods and
services
- 1. LAND
- free good= goods with no opportunity
cost, they are free, e.g. air, education
- Economic good= goods that are scarce and therefore
have an opportunity cost, e.g. oil, food, clothes
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