Resources - Meaning & Definition

What is the Resource? 

Resource could be defined as any thing used in production- both good and services. Economists have identified 5 types of resources used in the production function.

Those are

1. Labor

2. Capital

3. Land/Natural resource

4. Entrepreneurship

1. Labor is defined as “The time human beings spend producing goods and services.”

2. Capital could be defined as “Something produced that is long lasting and used to produce other goods”

3. Natural Resource is the naturally occurring materials that come with it. Land is also a natural resource.

4. The ability and willingness to combine the other resources- labor, capital, and natural resources – in to productive enterprise is called as “Entrepreneurship”

Categories kf Capital

Capital could be divided in to 2 basic categories:

1. Physical Capital

2. Human Capital.

1. Physical Capital: It is the part of the capital stock consisting of physical goods, such as machinery, equipments, and factories.

2. Human Capital: It is the skills and training of the labor force.

So, according to this we can identify that organizations have two basic inputs.

1. Capital

2. Labor