Question

Define production. Explain are the factors of production. With the help of an example explain the process of creation of form utility ​

Answer 1

Production is the process of making, harvesting or creating something or the amount of something that was made or harvested.

• The first requirement for production is land. Land as a production factor also includes other natural resources like water, forests and minerals found in the earth’s crust.

• The second requirement for production is labour or workforce. These are the people who do the different tasks involved in production.

• 3rd and 4th factor in attachment

• Inputs like raw material and the money used for buying it, paying electricity bills and the wages of workers, etc. get used up in the production activity. These inputs are called working capital. The fourth requirement of production is human capital. Human capital is the knowledge and effort that is put in to arrange for the other factors like land, labour and physical capital to start the production of goods or services.

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