1.1.3 economic resources

economic resources are

the factors of production

production is

a process or set of processes that converts inputs into outputs of goods

the factors of production are

capital,enterprise,land, labour

capital is

physical, fixed or working

physical capital are

goods which can be used in the production process

fixed capital is

machines and buildingsw

working capital is

finished or semi-finished consumer goods

rewards/incentive of capital is

interest from the investment

enterprise is

managerial ability, the entrepreneur is someone who takes risks, innovates, an uses the factors of production

reward/ incentive of enterprise is

profit, it acts as an incentive to take risks

land is

natural resources such as oil, coal, wheat and water, it can also be the physical space for fixed captial

the reward/ incentive for land is

rent

labour is

human capital, which is the workforce of the economy

the reward/incentive of labour is

wages

capital/producer goods are

used in the production of other goods

consumer goods are

goods consumed by households and individuals used to satisfy needs and wants

the environment is a

scarce resource- there are only a limited amount of resources on the planet which are made up of renewable and non-renewable

renewable resources can be

replenished so the stock level can be maintained overtime assuming the rate of consumptions is less than the rate of replishment

renewable resources can be managed by

preventing or limiting deforestation or imposing fishing quotas so they are sustainable however they are currently being consumed faster than the planet can replenish them

to meet global demand of resources,

the worldwide fund for nature claims that two planets will be required to meet global demand by 2050 if current demand level continues

non-renewable resources

cannot be renewed so the stock level decreases overtime as it is consumed, methods

to extend the life of non-renewable resources

methods such as recycling and finding substitutes can reduce the rate of decline of the resource