Define production. Explain the factors
production
Answers
Factors of production is an economic term that describes the inputs used in the production of goods or services in order to make an economic profit. ... The factors of production include land, labor, capital and entrepreneurship.
Production is a process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output). It is the act of creating an output, a good or service which has value and contributes to the utility of individuals.
There are two types of factors: primary and secondary. The previously mentioned primary factors are land, labor, and capital goods. Materials and energy are considered secondary factors in classical economics because they are obtained from land, labor, and capital. The primary factors facilitate production but neither becomes part of the product (as with raw materials) nor becomes significantly transformed by the production process (as with fuel used to power machinery). Land includes not only the site of production but also natural resources above or below the soil. Recent usage has distinguished human capital (the stock of knowledge in the labor force) from labor.[1] Entrepreneurship is also sometimes considered a factor of production.[2] Sometimes the overall state of technology is described as a factor of production.[3] The number and definition of factors vary, depending on theoretical purpose, empirical emphasis, or school of economics.
