Productive Resources

A
dam Smith (born in 1723) was the first person to study the historical development
of industry and trade. His work created the study of economics and developed
the concepts of the productive resources. Let’s take a look at these factors.

Productive Resources are the resources used to make goods and services (i.e., natural resources, human resources and capital
goods.

1. Natural Resources / Land are the resources supplied by nature. They include ores, trees, land and the other things nature
provides.

2. Human Resources / Labour consists of the talents and skills of human beings that contribute to the production of goods
and services.

3. Capital Goods are human-made materials needed to produce goods and services. Capital goods include buildings,
machinery, equipment and tools.

Some experts say that there is a fourth factor:

4. Enterprise — entrepreneurial ability. Entrepreneurs are people who organize other productive resources to make goods
and services. It often is said that a business will succeed or fail relative to the ability of the person or entrepreneur involved in it.
This individual assumes risk for the business. They may or may not be paid for their efforts.

Now that you know these terms, let’s see if we can use them to solve sort these factors.
At the top of a paper write Natural Resources, Human Resources and Capital Goods. Place these items under the correct
heading.

• Delivery Truck • Bushel of corn • Doctor

• Teacher • River • Bulldozer
• Factory • Hair stylist • Tractor
• Tree • Gold • Farmer
• ATM machine • Barrel of oil • Factory worker

Do you all agree on the placement of these items and why?

Are the factors interdependent? (In other words, do the factors affect one another?)

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Productive Resources — Answer Key
Natural Resources Human Resources Capital Goods
Tree Teacher Delivery truck
Bushel of corn Hair stylist Factory
River Doctor ATM machine
Gold Farmer Bulldozer
Barrel of oil Factory worker Tractor

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