what are the factor of production
Answers
Explanation:
Factors of production are the resources people use to produce goods and services; they are the building blocks of the economy. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship.
Answer:
Factors of Production – definition and explanation
Factors of production refer to the different elements that are used in producing goods and services.
Factors of production are inputs into the productive process.
The four main factors of production are:
factors-of-production
Land – this is raw materials available from mining, fishing, agriculture
Capital – This is a manufactured item used to aid production, for example, machines, factories and computers
Labour – Human workers who are involved in producing the good.
Entrepreneur – the individual or business who take the initiative to set up a business and employ different factors of production (labour, capital and entrepreneur)
Other potential factors of production
Knowledge – human capital – the skills and ability of workers. For example, a doctor who spent 15 years studying medicine is more productive than non-skilled workers.
State of technology – some schools of economics consider the state of technological development to be a factor of production. It will influence the effectiveness of capital investment.
Social capital – the coherence of society. Is there trust and working legal systems which enable entrepreneurs to have greater faith in setting up a business
Cultural heritage – if there is a strong tradition of investment and business, it is easier to replicate past business models.
Examples of factors of production
Land – raw materials
Oil
Coal
Fish
Agricultural produce – fruit, vegetables, meat
Commercial real estate – land to build factories
Labour (human resources)
Workers – full time, part-time, temporary, permanent
Management
Capital (man-made resources)
Machines
Tractors, spades
Computers, Phone
Office block
Factory, Assembly line
Public infrastructure – communication and roads needed to transport goods across the country.