Productive Resources

Productive resources are the inputs an economy uses to produce goods and services. The phrase is common in school and introductory textbooks; economists more often call the same thing factors of production, where the full explanation sits. Some texts also say economic resources or simply inputs.

They are usually grouped into four kinds: natural resources, or land; human effort, or labor; tools, machines and buildings, known as capital goods; and the organising and risk-taking of the entrepreneur. Because every economy has only a limited amount of each, they are central to the idea of scarcity: using a resource for one purpose means it cannot be used for another. Capital here means real equipment, not money in a bank account.