- The private sector utilizes labor by employing human beings.
- Labor can be physical or mental, unskilled, semi-skilled, or skilled.
- In return for labor, the private sector pays “wages”.
- Natural capital includes land and raw materials.
- The private sector uses these naturally available resources.
- It pays “Rent” for the use of natural resources.
- These resources are combined with entrepreneurship and physical capital.
- This combination helps produce desired goods and services.