1.3 Economic Resources

• Economic Resources

  • Production is a process, or set of processes, that convert inputs into outputs. Inputs are of course also used to produce the capital goods that are necessary for the eventual production of consumer goods. The four factors are land, labour, capital, enterprise. 
• The factors of production

  • The factors of production are the inputs into the production process.
• • Entrepreneurs are the people who address the issues introduced earlier. An entrepreneur decides how much of the other factors of production, including labour, to employ. The entrepreneur is a financial risk taker and decision maker, profit, which is the entrepreneurs financial reward, results from successful decision making. Entrepreneurial profit is the profit left over after the cost of employing the other factors of production is deducted from the sales revenue gained from the sale of the goods and services the entrepreneur decides to produce. 
• The environment as a scarce resource

  • Environmental resources comprise all the natural resources that are used or can be used in the economic system. These are physical resources, gases and abstract resources like solar energy. 
• • Renewable resources which are reproducible and perpetually maintainable with management by humans. Nonrenewable resources cannot be regenerated or regeneration is so slow that the stock of resources cannot meaningfully be increased. Recyclable non-renewable resources such as minerals, paper, glass can be reused in the economic system . Environmental resources are part of the factor of production, land.