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Definition:

Economic resources are those scarce resources which help in the production of goods and services”.

Types:

The economic resources are classified under two main types:

(1) Property Resources and (2) Human Resources.

(1) Property Resources:

In property resources, we include land and capital. The term land is used to describe all natural resources which are used in the process of production and yield income. These resources which are free gifts of nature include agricultural land, forests, mineral deposits, fisheries, rivers, lakes, oil deposits, etc.

The term capital refers to all man made resources which aid to production. Thus machinery, equipment, tools, factories, storage, transportation, etc., which are used in the production of new goods and supplying them to the ultimate consumers are capital resources.

(2) Human Resources:

Human resources include labor and entrepreneurial ability. Labor in economics refer to human effort, physical and mental which are directed to the production of goods and services. Thus factory worker, clerk, typist, teacher, doctor. Judge, physicist, etc., fall under the category of labor.

It may here be noted that it is the services of labor which are bought and sold for money and not the labor itself. As regards the supply of labor, it depends upon:

(i) Size of total population (ii) age composition of the population (iii) the availability working population (iv) the working hours devoted to production (v) the remuneration paid to the workers, etc., etc.

The entrepreneur or enterprise is the person who takes initiative and combines resources for the production of goods and services:

(i) Makes basic business policy decisions (ii) attempts to introduce new products, new techniques, new forms of business organization, etc., and (iii) bears risk.