Question

Explain two influences on what factors of production a firm use?

Answer 1

Factors of production are the inputs needed for the creation of a good or service. The factors of production include land, labor, entrepreneurship, and capital.

The modern definition of factors of production is primarily derived from a neoclassical view of economics. It amalgamates past approaches to economic theory, such as the concept of labor as a factor of production from socialism, into a single definition.

Land, labor, and capital as factors of production were originally identified by the early political economists such as Adam Smith, David Ricardo, and Karl Marx. Today, capital and labor remain the two primary inputs for the productive processes and the generation of profits by a business. Production, such as in manufacturing, can be tracked by certain indexes, including the ISM Manufacturing Index.

Answer 2

Two influences on what factors of production a firm use :

Explanation :

• The factors of Production refers to the inputs required for goods or service.
• The factors of production include land, labor, entrepreneurship and capital.

Two influences on what factors of production a firm use :

• The land is a major factor of production. It can take various forms from agricultural land to commercial real estate.
• Capital facilitates the entrepreneurs and company owners to purchase capital goods or land or pay wages.

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