Question

Explain the factors of Production with characteristics.​

Answer 1

Answer:

The factors of production or inputs are classified as: land (includes all those free gifts of nature that a man uses in producing the things that satisfy his wants), labour (all human efforts of body or mind, undertaken in the expectation of reward), capital (all those physical assets that help in the further ...

Answer 2

Factors of production

Land

It refers to all natural resources. All natural resources either on the surface of the earth or below the surface of the earth or above the surface of the earth is Land.

One uses the land to produces goods. It is the primary and natural factor of production. All gifts of nature such as rivers, oceans, land, climate, mountains, mines, forests etc. are land.

The payment for land is rent.

Characteristics of Land as a Factor of Production

• The land is a free gift of nature.
• The land has no cost of production.
• It is immobile.
• The land is fixed and limited in supply.

Types of Land

• Residential
• Commercial
• Recreation
• Cultivation
• Extraction
• Uninhabitable

Labor

All human effort that assists in production is labour. This effort can be mental or physical. It is a human factor of production. It is the worker who applies their efforts, abilities, and skills to produce.

The payment for labour is the wage.

Characteristic

• It is a human factor.
• One cannot store labour.
• No two types of labour are the same.

Types of Labor

• Unskilled
• Semi-skilled
• Skilled
• Professional

Capital

Capital refers to all manmade resources used in the production process. It is a produced factor of production. It includes factories, machinery, tools, equipment, raw materials, wealth etc.

The payment for capital is interest.

Characteristics

• Capital is a manmade factor of production.
• It is mobile.
• It is a passive factor of production.
• Types of Capital
• Fixed
• Working
• Venture

Entrepreneur

An entrepreneur is a person who brings other factors of production in one place. He uses them for the production process. He is the person who decides

Characteristics

• He has imagination.
• He has great administrative power.
• An entrepreneur must be a man of action.
• An entrepreneur must have the ability to organize.
• He should be a knowledgeable person.
• He must have a professional approach.

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