What are economic resources? What categories do economists use to classify them? Why are resources also called factors of production? Why are they called inputs? t are economic resources? What categories do economists use to classify them? Why are resources also called factors of production? Why are they called inputs?

Any resource that is available to society and can be used in the production of goods and services is an economic resource. It can be naturally available or manufactured by humans. Thus, resources that are used in economic activities to produce goods and services are called economic resources.

The economic resources can be categorized as follows.

• Country: It includes all the natural resources, such as a piece of land, forests, minerals, water bodies, etc.
• Labor: It includes the physical and mental activities of humans in the production process.
• Capital: It includes the resources that aid in the production process, such as factories, transportation, warehouses, and others.
• Entrepreneurship ability: It is referred to as the skills of those who invest in other resources used in the production process. It also includes the wit and mindset of a person who tends to carry out different activities.

The factors of production are the components that are responsible for carrying out the production of goods and services. Thus, in other words, the factors of production are the inputs that are utilized during the production process. As economic resources are used as inputs in the production of goods and services, they are also called factors of production.

Any item of service that is utilized at the initial process for the production of a good or service is called an input. As economic resources are used in the initial phase of the production process, they are also called inputs.