Learn It 1.2.2: Factors of Production

Natural Resources

natural resources

Natural resources have two fundamental characteristics:

  1. They are found in nature.
  2. They can be used for the production of goods and services. In order to provide benefit, people first have to discover them and then figure out how to use them in the production of a good or service.

Examples of natural resources are land, trees, wind, water, and minerals.

A key feature of natural resources is that people can’t make them. They also tend to be limited.
river with rocks
Figure 1. Water from a river is a natural resource.

New natural resources can be discovered or new ways of extracting them, such as fracking for gas and oil. These natural resources can be renewable, such as forests, or nonrenewable, such as oil or natural gas. It’s also possible to invent new uses for natural resources such as using wind to generate electricity. Resources that are cultivated or made with human effort can’t be considered natural resources, which is why agricultural crops aren’t natural resources.