TYPES OF RESOURCES

There are many representations of the resources throughout the world of science and technology. An economist will tell you that they are goods and services used to produce valuable products that meet human needs and wants. A biologist will define them as substances that are required by living organisms for normal growth, maintenance and reproduction. Even a computer scientist will tell you that resources are any physical or virtual components of limited availability within a computer, used for creating a system. Of course, each interpretation is closely tied to its respective field of study, covering only what is relevant to that particular field. 
But all these definitions have something in common, which is the fact that resources are the means through which a desired product, state or outcome is achieved.

In economics the resources are human-centered and they are used in order to create output(goods and services) through which we can satisfy our needs and wants. Because they are scarce, any goods and services obtained through them become scarce too. They are often called factors of production, and are of three broad types:

• Human resources: labour. The labour force is limited in number, but also in skills. This limits the productivity of labour. 

• Natural resources: land and raw materials. The world’s land area is limited, as are its raw materials. They divide in two subtypes: renewable(air, water, sunlight) and non-renewable(petrol, gas etc.) 

• Manufactured resources: capital. Capital consists of all those inputs that have each had to be produced in the first place. The world has a limited stock of capital: a limited supply of factories, machines, transportation and other equipment. The productivity of capital is limited by the state of technology.

A special kind of human skill is called entrepreneurial ability. Entrepreneurship is also considered a factor of production since someone must complete the managerial functions of gathering, allocating and distributing economic resources or consumer products to individuals and other businesses in the economy. 
The entrepreneur tries to discover and act on profitable opportunities by hiring resources and assuming the risk of business success or failure. Resource owners are paid wages for their labour, interest for the use of their capital, and rent for the use of their natural resources. The entrepreneur’s effort is rewarded by profit, which equals the revenue from items sold minus the cost of the resources employed to make those items. The entrepreneur claims what’s left over after paying other resource suppliers. 

Therefore we can come to the conclusion that, through production, resources are used to create goods and services destined for consumption. The transfer of goods and services from a producer to a consumer is made possible through exchange, which is carried out through markets. We will talk about what markets are in the next post.