what are the different factors of production
Answers
Explanation:
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. The first factor of production is land, but this includes any natural resource used to produce goods and services.
Answer:
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.
Explanation:
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