Question

What do you mean by the term ‘factors of production’? Explain each factor of production in detail for 5 marks

Answer 1

Answer:

FACTORS OF PRODUCTION -

• The resources or inputs that is needed in any production is called factors of production

i) Land - It is needed in any type of production. it is used to set up industries or small shop.

ii) Labour - Labour is needed to do work .some works require skilled labour wheares some requires labour who can do manual work.

iii) Capital - There are two types of capital

a) Fixed capital - Capital which can be used manytimes , once it is purchased is called fixed capital.

• It did not need to buy everytime it is needed to work

for ex - Machines like tractors , thresher

b) Working capital - Capital which can not be used many times.it is used only one time

• It needs to buy everytime it is needed.

• For ex - money in hand , raw materials , seeds

• Human capital - It is the most necessary factor of production. only human capital can combine land, labour and capital and run the production.