Economics Definitions

1. Factors of Production
Definitions and Examples

2. Factors of Production are…
 The resources used to make goods and
services
 Separated into three categories
 Land
 Labor
 Capital

3. Land
 For Economic purposes, Land refers to all
Natural Resources
 Examples:
 Minerals
 Timber
 Real Estate

4. Labor
 For Economic purposes, refers to the actual
work an individual or individuals does
 Examples:
 Un-Skilled Labor
 Semi-Skilled labor
 Skilled Labor
 Professional Labor
 (All 4 Categories show “work” being done)

5. Capital
 For Economic purposes, Capital refers to
man-made or possessed resources used to
produce something else and falls into two
categories
 Physical Capital
 The tools or equipment used in production
 Human Capital
 The skills or training of the workers
 Don’t confuse this with Labor (The actual
performance of work using your human capital)