WHAT IS YOU REFLECTON/ LEARNINGS ABOUT THESE THINGS?

Types of Resources

Our multimedia lecture identifies three types of resources (1) land, (2) labor, and (3) capital. Some economists identify a special, and important type of labor: (4) the entrepreneur.

1. Land

Land is one of those words in economics that has a different meaning than in the real world. Examples of "land" would include lakes, rivers, oceans, iron ore, crude oil, and the land beneath our feet. A definition would be "non-human natural resources. Why don't we just call them natural resources? that would be too easy.

2. Capital

Examples of "capital "include machinery, tools, highways, and factories. Note that capital in economics does not mean not "money". When you hear someone say, "we need to raise enough capital (money) to start a new business". They are using a different definition of the term "capital".

Is money a resource? NO. If resources are those things that we use to produce the goods and services we want, then what do we make out of money? I guess you could use it to wallpaper a room, or if you bleach all the ink off of money you could make a notepad.

Capital, then, is a manufactured resource - something that you produce and use it to produce something else.

3. Labor

Labor is the mental or physical effort exerted by an individual to produce goods and services.

Blue-collar job- A job that requires more physical effort than mental effort

White collar job- A job that requires more mental than physical effort

4. Entrepreneurial Ability

The entrepreneur is a very important type of resource. Without the entrepreneur, we would not get any goods or services. The entrepreneur does four things:

1.comes up with new ideas

2.brings all the other resources together

3.makes the basic decisions, and

4.takes the risks to earn profits (or losses.

Without the entrepreneur all the other resources just lie around and do nothing. For example, Russia has much "land" (natural resources). They have a fairly well educated labor force. and a pretty good capital infrastructure ("good" compared to many countries, but rapidly deteriorating). What Russia is lacking are entrepreneurs. People with the ideas and abilities to put hose ideas into action. Soon after the collapse of communism, the US sent Peace Corps volunteer to Russia, volunteers with MBAs (Masters of Business Administration) and/or business experience.