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In today’s class, we will be talking about the Factors of Production. Enjoy the class!
Factor Of Production
What is the factor of production?
Factors of Production can be defined as the basic resources or agents used for producing goods and services. Factors of production make it possible for goods to be produced in the required quantity and quality.
The factors of production are land, labour, capital and entrepreneur.
LAND:
The land is a gift of nature; it refers to the resources provided by nature to aid the production of goods and services. Examples of land are rivers, farmlands, seas, the fishes in them, forestry minerals such as coal, crude oil, iron etc. Others are the climatic conditions like rain, sunshine, animals etc.
Features of land
The following points below are the characteristics of a land;
- Land is immobile i.e. the location of land cannot be changed; it is fixed.
- The value of land varies from one location to another.
- It is a gift of nature.
- The supply of land is limited.
- The reward for land is rent
LABOUR:
Labour is the mental or physical efforts of man, which is directed towards the production of goods and services. Examples of labour are the work of farmers, carpenters, teachers, police officers etc.
Characteristics of labour
- Labour is mobile i.e. can move from one location to another
- Labour controls other factors of production.
- It requires motivation.
- Labour is not fixed.
- Labour is a human factor
CAPITAL:
Capital is defined as the man-made assets used in production. It is the man-made wealth used in the production of goods. The reward of capital is “interest”.
Characteristics of capital
- Capital is man-made.
- It is durable.
- Capital exists in different forms
- It promotes division of labour
- Capital exists in different forms
The entrepreneur is the person who combines the all other factors of production. He coordinates and directs the factors of production to produce goods and services.
Characteristics of an entrepreneur
- The entrepreneur takes the risk in a business.
- He coordinates and manages all the other factors of production.
- The entrepreneur decides for the organization.
- Provides the capital.
- The reward for an entrepreneur is “profit”
In our next class, we will be talking aboutOccupation. We hope you enjoyed the class.
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FAQs
The factors of production are the inputs used to produce a good or service in order to produce income. Economists define four factors of production: land, labor, capital and entrepreneurship. These can be considered the building blocks of an economy.
What are the factors of production grade 11 notes? ›
The four Factors of Production are Land, Labor, Capital, and Entrepreneurship, and these are the things that create all of the goods and services that make up an economy.
What is capital as a factor of production lesson note? ›
CAPITAL: is a man- made asset which is used to aid production . It is goods not wanted directly for its sake, but for the contribution it makes to the production of further consumer and producer goods. It is described as wealth put aside for the creation of further wealth.
Why are the factors of production important lesson note? ›
Factors of production are crucial for economic growth and development. Here's why they matter: Creation Of Goods & Services: By combining land, labor, capital, and entrepreneurship effectively, factors of production enable businesses to produce goods that people want to buy or use.
What are the 4 and or 5 factors of production? ›
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship.
What are the factors of production and an example of each? ›
The five factors of production are land, labor, capital, entrepreneurship, and knowledge. Food production is a good example.
What are the four factors of production answer key? ›
The factors of production are land, labor, entrepreneurship, and capital.
What are the factors of production in Quizlet? ›
The 4 factors of production are land, labor, capital, and entrepreneurship.
Is money a factor of production? ›
Money isn't considered a factor of production but it does help make the production process easier. That's because it isn't actually a productive resource so it isn't directly involved in the production of goods and services. Instead, money is used to pay for raw materials, wages, and capital goods.
What are the three major factors of production and capital? ›
Describe the three factors of production.
2) Characteristics of Capital
a) Capital is man-made (artificial) b) It increases the productivity of resources c) Supply of capital is elastic. It can be produced in large quantity when its requirement increases. d) Capital is perishable as it can be destroyed. e) Capital is highly mobile.
Why is labor an important factor of production? ›
Labor is an important factor of production because of the following points. Labor provides brain to work. It is an active element that uses the power of skills and knowledge in the production process. Labor input puts together other factors of production to produce goods and services.
How to teach factors of production? ›
Instructions
- Show students a food product, such as a cookie or donut. ...
- Review and discuss answers. ...
- Start the video lesson Factors of Production in Economics: Definition, Importance & Examples.
- Pause at 0:48 and ask: ...
- Ask students to create a three-column chart labeled 'Land,' 'Labor,' and 'Capital. ...
- Resume the video.
production include land, labor, capital, and enterprise.
Which factors of production is most important and why? ›
Among these four, the most important one is the production of the human capital as it can incorporate labor, land, and also physical capital. This can generate output for their businesses or their own.
What are the four factors of production and their rewards? ›
The remuneration to them are as follows:
- Land: Rent is a reward for the use of land.
- Labour: Wages are the reward for labour.
- Capital: Interest is the reward for capital.
- Entrepreneur: Profit is the reward for an entrepreneur.
In conclusion, factors of production are the inputs or resources required to produce goods and services. The four main factors of production are land, labor, capital, and entrepreneurship.
What are the characteristics of production? ›
Factors of production is an economic concept that refers to the inputs needed to produce goods and services. The factors are land, labor, capital, and entrepreneurship. The four factors consist of resources required to create a good or service, which is measured by a country's gross domestic product (GDP).
What are the factors of production in a case study? ›
Land, Labor, Capital, and Entrepreneurship are the 4 factors of production that are needed to produce any good or service. For example, a business needs land to build its plant, labour for the working line, capital to make production fast and efficient, and entrepreneurship to make the right decisions.
