ECONOMIC RESOURCES

1. ECONOMIC RESOURCES Also called: Factors of Production and Economic Inputs

2. Economic Resources • Include everything that can be used to make products • All the ingredients used to make all the goods, services, and ideas produced in an economy • Think of a product you’re wearing now; • What economic resources were used to produce that good?

3. Goods, Services and Ideas • Good – a physical item, something you can touch • Examples… • Services – actions that are done for you • Examples… • Ideas – a concept, cause, issue, image, or philosophy that can be marketed • Examples……

4. Categories of Economic Resources or Factors of Production • Natural Resources • Human Resources or Labor • Capital Resources • Entrepreneurial Resources

5. Natural Resources • (Land) – anything provided by nature that affects the productive ability of a country • Raw materials • Soil, water, minerals, plants, animals, climate • Scarce • Every good that you have was made from one or more natural resources. • Every service that you use involved the use of natural resources • Not equally distributed among nations • Our productive ability depends on our fertile soil, minerals, water, and timber resources and mild climate

6. Human Resources or Labor • Human effort, either physical or mental, that goes into the production of goods and services • Workers -the people who turn resources into products • Human capital – the accumulated knowledge and skills of people; total value of each person’s education and skills – technological skills very valuable in today’s world • Includes all the people in a country who are available to work • Includes the workers’ levels of education, skills, and productivity (the amount of work a person can do in a specific amount of time) • Countries can be economically successful with few natural resources if their workers are highly educated, highly skilled, and very productive.

7. Capital Resources/Goods • Buildings, tools, machines, and other equipment that are used to produce other goods but do not directly satisfy human wants • Examples????? • Because capital consists of manufactured products, it is also called capital goods. • Money • Technology – the use of tools to improve human life • Tools – any objects that can be used to change the natural environment for to extend human capabilities • Ex.-pencils, computers, bulldozers, assembly lines, internet……. • The level of technology available in a country has a major impact on its economy. • Benefits of advanced technology – better food, housing, health care, and more consumer goods (stuff)

8. Entrepreneurial Resources • The willingness and ability to start a new business • New ideas for new products, services, businesses • Who are/were these people: • Dave Thomas; Mark Zuckerberg; Steve Jobs • Ability to organize economic inputs into a successful business • Ability to take risks, financial and personal, to start a business. • The number and quality of entrepreneurs in a country have a major impact on the success of the economy.

9. Additional Important Info • Government provides many services that are essential to the operation of a business – often called the 5th factor of production • Infrastructure– the transportation systems and utilities necessary for a modern economy • usually large and cannot be moved form place to place • Includes: highways, bridges, railroads, public transportation, seaports, airports, and postal service • Utility infrastructure includes sanitation systems, electric power plants, water systems, and telephone service • Infrastructure provides the foundation on which industry and business are built • Most infrastructure has been built by governments but private companies have built railroads and oil pipelines