Economic Resource

An Economic Resource is a resource that is used in the production of goods and services, contributing to economic activities and providing value in the economy (to produce goods and services that meets human needs and wants).

• Context:
  • It can (typically) be categorized into Land, Labor, Capital, and Entrepreneurship, which are commonly known as the Factors of Production.
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  • It can be either a Tangible Resource, such as natural resources, machinery, or buildings, or an Intangible Resource, such as human capital or intellectual property.
  • It can be used in the creation of Economic Goods and Services, playing a crucial role in determining the output and efficiency of an economy.
  • It can be allocated and managed through various economic systems, such as Market Economies, Command Economies, or Mixed Economies.
  • It can contribute to the overall Productivity of an economy, affecting its growth and development.
  • It can be subject to Scarcity, where limited availability requires efficient allocation to maximize economic output.
  • It can be exchanged in markets for Value, whether through barter, trade, or monetary transactions.
  • It can be enhanced through investment, such as improving physical capital or education to boost human capital.
  • It can be influenced by Technological Advancements, which can increase the productivity and utility of existing resources.
  • It can be a focus of Economic Policy, where governments seek to optimize the use of resources to achieve economic goals like growth, stability, and equity.
  • It can include Natural Resources, such as minerals, water, and land, which are foundational to economic activity.
  • It can be affected by external factors such as Environmental Conditions, Geopolitical Events, and Market Trends, which can impact its availability and value.
  • It can be measured in terms of its contribution to Gross Domestic Product (GDP) and other economic indicators.
  • It can be depleted or conserved, with implications for Sustainability and long-term economic health.
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• Example(s):
  • Economic Assets, such as:
    • Real Estate: Land and buildings used for commercial or residential purposes, providing economic value through rent, sales, or development.
    • Machinery: Equipment used in manufacturing or production, contributing to economic output.
    • Intellectual Property: Patents, trademarks, and copyrights that generate revenue through licensing or sales.
  • a Factor of Production, such as:
    • Land: Natural resources available for use in production, such as farmland, forests, and mineral deposits.
    • Labor: The human effort used in production, including physical and intellectual contributions.
    • Capital: The machinery, buildings, and tools used in the production of goods and services.
    • Entrepreneurship: The ability to organize and manage resources to create new goods, services, or businesses.
  • Financial Resources, such as Financial Assets, such as:
    • Investment Capital: Funds used to finance the creation or expansion of businesses and infrastructure.
    • Bank Deposits: Cash reserves held in financial institutions, available for lending or investment.
    • Financial Stocks and Financial Bonds: Financial instruments that represent ownership or debt, providing capital to businesses and governments.
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• Counter-Example(s):
  • a Computing Resource: While valuable in the context of technology and operations, computing resources are not specifically categorized as economic resources unless used directly in economic production.
  • a Biological Resource: Refers to the natural biological materials used for ecological purposes, which may not always be utilized in economic activities.
  • a Recreational Resource: Resources used for leisure and entertainment, which may not contribute directly to economic production.
  • a Cultural Resource: Resources such as heritage sites or traditional practices, which have cultural value but may not be considered economic resources unless monetized.
• See: Factors of Production, Natural Resources, Raw Materials, Human Resources, Labor Force, Infrastructure, Economic Decision Making, Output (Economics), Production Function, Land (Economics), Capital (Economics), Raw Material, Natural Resource, Human Capital, Labor Force.

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References

2016

• (Wikipedia, 2016) ⇒ https://en.wikipedia.org/wiki/Factors_of_production Retrieved:2016-9-28.
  • In economics, factors of production, resources, or inputs are what is used in the production process to produce output — that is, finished goods and services. The amounts of the various inputs used to determine the quantity of output according to a relationship is called the production function. There are three basic resources or factors of production: land, labor and capital. The factors are also frequently labeled "producer goods or services" to distinguish them from the goods or services purchased by consumers, which are frequently labeled "consumer goods". All three of these are required in combination at a time to produce a commodity.

    There are two types of factors:

    Factors of production may also refer specifically to the previously mentioned primary factors, (land, labor (the ability to work), and capital goods) applied to production.

    Materials and energy are considered secondary factors in classical economics because they are obtained from land, labour and capital.

    The primary factors facilitate production but neither become part of the product (as with raw materials) nor become significantly transformed by the production process (as with fuel used to power machinery). Land includes not only the site of production but natural resources above or below the soil. Recent usage has distinguished human capital (the stock of knowledge in the labor force) from labor. Entrepreneurship is also sometimes considered a factor of production. Sometimes the overall state of technology is described as a factor of production. The number and definition of factors varies, depending on theoretical purpose, empirical emphasis, or school of economics.

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