Factors of production
These are resources used in the process of production. They are necessary for the production of goods and services, which are used by human beings to satisfy their needs. There are four types of resources:
Human resources
This takes the following two forms - labour and entrepreneurship.
Labour is directed human physical and mental effort exerted towards the fulfilment of an economic objective. All persons employed by someone else and paid in wages or salaries constitute labour.
Female students at the University. Educate a Woman, Education a Nation
Entrepreneurship is directed human effort towards the fulfilment of an economic objective, Entrepreneurship is: to take the risk that accompanies any new economic venture; and see it through to its successful conclusion; the ability to understand what the market wants; and the ability to innovate. All self-employed persons or owners of their firms who are paid in profits are entrepreneurs.
Natural Resources. Are the resources which the biosphere has placed at our disposal (gifts of nature) and these include three types of resources:
Renewable resources include timber, water and wind power, agricultural sesources, soil, water, animal stock, plants, crops, food-producing trees, etc.
As these resources are governed by renewable cycles and given proper management, they can provide us with a perpetual supply.
Lake Bunyonyi.
Non-renewable resources include mineral deposits such as gold, silver, platinum, coal, petroleum, iron ore, bauxite, copper, zinc, lead, magnesium, etc. which exist in finite quantities in the earth's crust and therefore are of diminishing supply.
Indestructible resources include land, in the sense of two-dimensional space necessary for habitation, and carrying out of economic activities. Land is employed here in its capacity to provide space rather than to grow crops on its soil.
Capital producer goods (real capital).
These are goods, which are required for the production of more consumer
goods in the future. They are man-made instruments which assist humans
in the process of production and they include all types of tools,
equipment, machines, buildings, pipelines, transmission lines, dams,
railways, roads, ports, etc
Financial capital (money or credit) generally accepted as a medium of exchange used to acquire command over resources (human, physical and capital goods).