Question

What are economic resources? What categories do economists use to classify them? Why are resources also called factors of production? Why are they called inputs? t are economic resources? What categories do economists use to classify them? Why are resources also called factors of production? Why are they called inputs?

Short answer

All the resources that are used in the production of goods and services are economic resources.

Economic resources are categorized into four parts.

• Land
• Laboratory
• Capital
• Entrepreneurship skills

Resources are also called factors of production because they are used as inputs in the production process of goods and services.

Resources are called inputs because they are utilized in the initial phase of the production.

Step-by-step solution

Meaning of economic resources

Any resource that is available to society and can be used in the production of goods and services is an economic resource. It can be naturally available or manufactured by humans. Thus, resources that are used in economic activities to produce goods and services are called economic resources.

Categorization of economic resources 

The economic resources can be categorized as follows.

• Country: It includes all the natural resources, such as a piece of land, forests, minerals, water bodies, etc.
• Labor: It includes the physical and mental activities of humans in the production process.
• Capital: It includes the resources that aid in the production process, such as factories, transportation, warehouses, and others.
• Entrepreneurship ability: It is referred to as the skills of those who invest in other resources used in the production process. It also includes the wit and mindset of a person who tends to carry out different activities.

Economic resources are also called factors of production 

The factors of production are the components that are responsible for carrying out the production of goods and services. Thus, in other words, the factors of production are the inputs that are utilized during the production process. As economic resources are used as inputs in the production of goods and services, they are also called factors of production.

Economic resources are also called inputs

Any item of service that is utilized at the initial process for the production of a good or service is called an input. As economic resources are used in the initial phase of the production process, they are also called inputs.