Economics: Resources, Labor, Capital, and Entrepreneurship — Quick Notes

Renewable vs Nonrenewable Resources

  • Land surface and water: renewable; many mineral resources are nonrenewable and limited to single-use.

  • US reserves: vast known reserves of coal, oil, and natural gas.

Labor

  • Labor: work time and effort by people to produce goods and services.

  • Measurement: Census Bureau and BLS track labor each month.

  • March 2019: 163,000,000163{,}000{,}000 people had jobs or were available for work.

  • 2019 total time worked: 280,000,000,000280{,}000{,}000{,}000 hours.

  • Quantity grows with adult population; recent decades: more women in paid work, slight decline in men’s share.

Labor Quality and Human Capital

  • Quality depends on skill level: e.g., driver vs unskilled labor; computer-skilled workers more productive.

  • Human capital: knowledge and skills from education, on-the-job training, and experience.

  • You build your human capital now; grows with work experience and education; boosts output.

Capital

  • Capital: produced inputs used to produce goods/services (tools, machines, buildings).

  • Examples: hammers, computers, assembly lines, office towers, warehouses, dams, power plants, airplanes, factories, shopping malls.

  • Also includes inventories (unsold or unfinished goods) and infrastructure (highways, airports).

  • Capital improves labor productivity (e.g., a truck driver vs someone with a hand cart).

Capital Value

  • The BEA tracks total capital value in the US and its growth over time.

  • Current value: 60,000,000,000,00060{,}000{,}000{,}000{,}000.

Financial Capital

  • Financial capital (money, stocks, bonds) is not productive capital.

  • It provides financing but is not used directly to produce goods/services.

Entrepreneurship

  • Entrepreneurship: human resource that organizes land, labor, and capital to produce goods/services.

  • Entrepreneurs are creative, make strategic decisions, and bear risks.

  • Profit if ideas succeed; loss if ideas fail; rate of entrepreneurship is hard to measure.

Notable Examples

  • Highly visible entrepreneurs: Sam Walton (Walmart), Bill Gates (Microsoft), Kylie Jenner (Kylie Cosmetics).

  • They are part of a much larger base of entrepreneurs across firms big and small.