identify the various factor of production in this picture
Answer = In this picture the factor of production which are visible are - Land, Labour, Capital, Enterprise
Answers
Explanation:
Production
It is a process of combining various inputs to make something for consumptions. Production is an outcome of economic activity. For making or producing something, we need some tangible and intangible materials.
These materials are the various factors of production. Consider a simple example of paper crafting. To make an origami, we need paper, money to buy it, and the most important technique of folding.
Let us understand what we mean by the factors of production and their types.
Factors of Production
Anything that helps in production is the factor of production. These are the various factors by mean any resource is transformed into a more useful commodity or service.
They are the inputs for the process of production. They are the starting point of the production process. Factors of production are the parameters which affect the output of production.
Types of Factors of Production
Factors of production have been categorized into four types.
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
What to produce
Where to produce
How to produce
A person who takes these decisions along with the associated risk is an entrepreneur.
The payment for land is profit.
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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Explanation: In this picture the factor of production which are visible are - Land, Labour, Capital, Enterprise