Question

1)Describe the 4 main factors of production.
2) Diffrentiate between fixed and working capital.
3)What are the main reasons for growing different types of crops?

Answer 1

1). Four factors of production must be presented to produce good and services.
They are Land, Capital, Labor, and Entrepreneurs.

Land : Includes gifts of nature, or natural resources not man - made.

Capital : Includes the tools, equipment, and factories used in production.

Labor : Includes people with all their efforts and abilities.

Entrepreneurs : Individuals who starts a new Business or bring a product market.

2). Fixed Capital is required for the purchase of fixed or long term assets (machinery, land and building).

Working Capital is required to meet short term or current obligation (raw material, wages) and includes all current assets (cash, marketable securities, debtors).