our traditional account of capital theory begins with a rather arbitrary division of all productive factors into three categories :
1- natural resource provided by Nature in fixed supply, which cannot be augmented or used up. the return of this inelastic factor of land is called (pure economic ) rent .
2- Human labor resources, not produced in response to economic conditions , but taken by the economist as determined by social and biological factors. The return of this human factor called wages ( which includes the salaries for skilled workers as well as wages for unskilled workers ).
in the oversimplified traditional account, factors (1) and (2) are called " primary factors of production"-primary in the sense that their supplies are determined largely outside the economic system itself.to them we must now add an" intermediate" factor.
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