Why is money not considered to be a capital resource in economics? Why is entrepreneurial ability considered a category of economic resource, distinct from labor? What are the major functions of the entrepreneur?
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today we'll be solving problem nine from Chapter one of economic principles, problems and policies. So this question asked a few questions about economic resource is and how and why they're categorized. The first question wants to know why money is not categorized as an economic resource in the same way that capital resource is our, um, and this is because capital goods are defined as satisfying wants indirectly. Um, and they do this by aiding in the production of consumer goods. Money doesn't actually produce anything, and it doesn't satisfy, wants indirectly. It satisfies them directly. And so it's not used. Its on. Lee used to acquire capital goods, so it is not considered an economic resource. It all, and it is considered specifically distinct from capital. Resource is the next question asked about entrepreneur entrepreneurial ability and why this economic resource is different from labor. Entrepreneurial ability is different than labor because it's a strategic move, it combines the other economic resource is of labor, land and capital. Resource is in order to create a good and so unlike labor, the entrepreneur actually makes decisions innovates and bears risk. So that's why entrepreneur real ability is considered distinct from just labor and leading into the next question, as we just mentioned, What are the major functions of entrepreneurial ability? And so there's four major functions we want to outline of entrepreneurial ability. The first of all, is initiate. The combining of resource is so we're going to write initiate resource combination and this is combining labor, land and capital. Resource is in order create to create a consumer good. The next is making strategic business decisions. So this is sort of the how the when and the why of we're going thio combine the land, labor and capital resource is the third is innovation. The entrepreneur has to figure out how to combine Our other economic resource is in a new way that hasn't been done before. Finally, risk bearer the entrepreneur takes on the risk of if that firm fails because of the way they decided to combine their economic resource is so. These are the four major functions of the entrepreneur