explain the 4 factor of production?
Answers
Answer:
Land
Land as a factor of production is sometimes also referred to as natural resources. It includes all naturally-occurring resources such as soil, water, air, plants, etc. that can be used in the production process. Land has three important characteristics: (1) its quantity is fixed, i.e. perfectly inelastic, (2) it is immobile, which means it cannot be moved, and (3) it is passive in nature, because it cannot produce anything on its own.
Labor
Labor as a factor of production refers to the human effort that is used in the production of goods and services. It includes all physical and mental efforts that are made by employees during the production process. The employees receive wages in exchange for their efforts. Wages are a critical aspect, because they are necessary in order to be able to distinguish between labor and leisure activities.
Capital
Capital as a factor of production describes all man-made goods that are used in the production process. The capital stock may include goods such as machinery, tools, vehicles, semi-finished products, etc. It is important to note that capital is by definition a derived factor of production, since it requires the combination of land and labor (i.e. the other two factors of production).
Entrepreneurship
Even though entrepreneurship is not part of the classical factors of production, it is often added to the list as a fourth factor. The reasoning behind this is that entrepreneurship often leads to innovation, new processes or new products. Hence, it can increase production efficiency and act as a factor of production.
hope it helps u
Answer:
4Factor of production are
1) Land and other natural resources
2) Labour
3) Physical capital
4) Human resource