Which of the following best describes what economists mean by 'resources' or 'factors of production'?

• A. Finished goods and services available for consumption
• B. Inputs such as land, labor, capital, and entrepreneurship used to produce goods and services
• C. Money used to purchase products in the market
• D. Government policies that regulate economic activity

Answer: (B)

Verified step by step guidance

1. Understand that in microeconomics, 'resources' or 'factors of production' refer to the inputs used to produce goods and services, not the finished products themselves.
2. Recall the four main categories of factors of production: land (natural resources), labor (human effort), capital (machinery, tools, buildings), and entrepreneurship (the ability to combine the other factors and take risks).
3. Recognize that money is not considered a factor of production because it is a medium of exchange, not an input used directly in production.
4. Note that government policies, while influential in economic activity, are not classified as resources or factors of production since they do not directly produce goods or services.
5. Conclude that the best description of 'resources' or 'factors of production' is the inputs such as land, labor, capital, and entrepreneurship used to produce goods and services.