Question

What do you understand by the factor of production?

Answer 1

the factors of production are 4 types.these are land ,labour ,physical capital and human capital.these are the main factors . without anyone of them a production activity can not takes place .

1. Land is the naturally occurring materials of the planet that are used for the production of goods and services, including the land itself; the minerals and nutrients in the ground; the water, wildlife, and vegetation on the surface; and the air above.


2. Labor is the mental and physical efforts of humans (excluding entrepreneurial organization) used for the production of goods and services. Labor includes both the physical effort of factory workers and farmhands often associated with labor, as well as the mental effort of executives and supervisors.

3. Entrepreneurship is the special sort of human effort that takes on the risk of bringing labor, capital, and land together to produce goods. Entrepreneurship is the factor that organizes the other three. Without someone to organize production, the other three factors do NOT produce. A key component of entrepreneurship is risk.

4. Capital is the manufactured, artificial, or synthetic goods used in the production of other goods, including machinery, equipment, tools, buildings, and vehicles.



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