Explain the different factors of organization of Production.
Answers
Answer:
The factors of production are resources that are the building blocks of the economy; they are what people use to produce goods and services. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. ... Land resources are the raw materials in the production process.
Answer:
The factors of production are resources that are the building blocks of the economy; they are what people use to produce goods and services. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship.
Land: The first factor of production is land, but this includes any natural resource used to produce goods and services. Land resources are the raw materials in the production process. These resources can be renewable, such as forests, or nonrenewable such as oil or natural gas.
Labour: Labour actually means any type of physical or mental exertion. In economic terms, labour is the efforts exerted to produce any goods or services. It includes all types of human efforts – physical exertion, mental exercise, use of intellect, etc.
Capital: As a factor of production, capital refers to the purchase of goods made with money in production. For example, a tractor purchased for farming is capital. Along the same lines, desks and chairs used in an office are also capital. It is important to distinguish personal and private capital in factors of production.
Entrepreneurship: An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. The most successful entrepreneurs are innovators who find new ways produce goods and services or who develop new goods and services to bring to market.