What Are the Three Types of Economic Resources?
The three types of economic resources are commonly known as human resources, natural resources and capital resources. Economists often refer to these three resources as the factors of production.
Human resources refer to the output of labor applied to natural resources for conversion into a tangible good. A tangible good that began as a natural resource and had conversion by labor into an item with exchange value is known as wealth. Service is when labor results in material goods.
A natural resource refers to anything that is found in nature. This includes sun, air, water and oil. Anything not created by a human being is a natural resource. All tangible goods known as wealth began as natural resources. For example, a can of chicken soup once began as vegetable and animal, and with labor, became a tangible good.
Capital resource is the conversion of wealth into more wealth, such as the can of chicken soup that needs more than labor and nature for creation. It needed machinery and equipment. Also, truck drivers carried the finished product from one place to another. All economic resources, human, nature and capital, are in limited supply. Additionally, resources can only aid in production of one item at a time.
