BSEN 401 Lecture : Resources.docx

• School: University of Calgary
• Department: Business and Environment
• Course: BSEN 401
• Professor: William Huddleston

Document Summary

Definition: commodities are goods (physical) and services (non-physical) exchanged in markets. Definition: resources are the inputs used in the production of goods and services. It is the limit to resources that limits the production of commodities. Classical economics (@1770 - @1870) divided resources into three categories land, Capital, and labour , called the factors of production", but modern economics adds. Each factor of production has a corresponding factor return: rent for land, interest for. Capital, wage for labour, and profit for entrepreneurship. Since we concentrate only on labour and capital in this course, we will typically use profit for the return to capital but this is not strictly correct. Land is defined as a natural resource, i. e. , a non-human input not produced by society. Capital (k): capital is defined as a non-human input that has been produced by human society. Note: capital is always physical, not merely financial. The capital stock is the total amount of capital in an economy.