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In economics, the terms “land,” “labor,” and “capital” are used to refer to the factors of production. These are the things that are used in all economic activities. They are used to create the goods and services that are exchanged in an economy. The use of both renewable and nonrenewable resources is a form of economic activity and the factors of production are used in this activity.
The term “land” is used to refer to things that are not created by human beings. We might also refer to this as natural resources. Renewable and nonrenewable resources are both examples of land. A forest is a renewable resource and so is a river (since it can be used to create hydropower, for example). Oil and natural gas are nonrenewable resources. These things are not created by human beings and they are, therefore, “land.”
In order to use “land,” we also need to use labor and capital. Labor is defined as the work of human beings that goes into creating goods and services. Let us imagine, for example, that we want to use oil, which is both “land” and a nonrenewable resource. In order to do this, we need people to do the work of drilling for oil. We need them to do the work of refining the oil, transporting the oil, and selling the oil. All of this work is “labor.” We also need labor if we are using renewable resources. If we want to use a forest, for example, we need people to cut the trees and we need people to replant so that the forest will grow again.
Capital is defined as things made by human beings for the purpose of creating goods and services. In other words, these are the tools and the machinery that we use to make things that we can sell. In the case of oil, there is a great deal of capital needed. The equipment that is used to drill the wells, refine the oil, and transport the oil is all capital. In the case of forests, the machinery used to cut down the trees and to replant is also capital.
Both renewable and nonrenewable resources are examples of “land.” When we exploit those resources, we need to use both labor and capital. Together, land, labor, and capital are the factors of production that allow us to make goods and services.
Land important to the usage of renewable and non renewable resources because you need to have a specific location to produce, transform, process, and sell these particular resources. A firm needs to have a specific place to work on to and so that it is also accessible for consumers to buy their product.
Labor means workers or a firm's work/labor force. These people are need to help in various tasks the company wants them to do so. It can be resource collection, resource processing, packaging, distribution and selling. Aside from these physical forms of work, people concerned with the thinking and management are also parts of labor.
Capital is very important in starting up a business. It is not enough to have a lot of resources. You should also have the means to engage in it. Money is also needed to purchase the necessary equipment or machines for the business, construction of buildings and facilities, wages for the labor, others.
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