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University of Calgary
Business and Environment
BSEN 401
William Huddleston

Resources: 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 Entrepreneurship as a fourth category of resource. 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: 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. Bonds, stocks, mortgages, etc., are financial assets but they are no
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