Question

What is the use of natural resources in economics?

Hint:

Natural resources are vital to economic growth, production, and development, providing raw materials, energy, and fuel needed for industrial and agricultural processes.

Answer 1

Natural resources play a crucial role in economics as they are fundamental to the production process. These resources, which include land, water, minerals, and energy, form the basis of all economic activity. Below are the main uses of natural resources in economics:
Step 1: Production of Goods and Services.
Natural resources are directly used in the production of goods and services. For example, agricultural land produces food, forests provide timber, and minerals are used in manufacturing. Without natural resources, industries would not have the raw materials necessary for production.

Step 2: Source of Raw Materials.
Natural resources serve as raw materials for many industries. For instance, petroleum is a vital resource for the energy sector, and metals like iron and copper are essential for manufacturing machinery, tools, and infrastructure. These resources are transformed into finished products, contributing to economic development.

Step 3: Economic Growth.
The availability of natural resources is a key factor driving economic growth. Countries rich in natural resources can use them to generate wealth, attract investment, and create jobs. The extraction and export of resources like oil, coal, and minerals contribute significantly to a country’s GDP.

Step 4: Energy and Power.
Natural resources such as coal, natural gas, and renewable sources like wind and solar power provide energy and fuel for industries, households, and transportation. These resources are essential for powering economies and enabling industrialization.