Economic Resources 4.1.1.3

• Inputs to the production process are called "factors of production"
• The four factors of production

  land

  labour

  capital

  enterprise
• Land is the stock of natural resources
• Labour is the quantity / quality of human input into the production process
• Capital is goods made to supply other products
• Enterprise is the act of people organising the factors of production and taking risks
• Capital goods

  Goods used to make consumer goods and services
• Automation is the production technique of using machinery / technology to replace / enhance human labour
• Replacing labour is known as capital-labour substitution
• Non-renewable resources

  finite in supply

  rate of extraction determines market price
• Renewable Resources

  Infinite if the rate of extraction is lower than the rate of regeneration