What do you understand by the term human knowledge under Factor of production
Answers
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:
1) Land – this is raw materials available from mining, fishing, agriculture
2) Capital – This is a manufactured item used to aid production, for example, machines, factories and computers
3) Labour – Human workers who are involved in producing the good.
4) 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
5) 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.
6) 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.
7)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
8)Cultural heritage – if there is a strong tradition of investment and business, it is easier to replicate past business models.