Explain the factors of Production with characteristics.
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Explain the factors of Production with characteristics.
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The factors of production or inputs are classified as: land (includes all those free gifts of nature that a man uses in producing the things that satisfy his wants), labour (all human efforts of body or mind, undertaken in the expectation of reward), capital (all those physical assets that help in the further ...
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Factors of production
Land
It refers to all natural resources. All natural resources either on the surface of the earth or below the surface of the earth or above the surface of the earth is Land.
One uses the land to produces goods. It is the primary and natural factor of production. All gifts of nature such as rivers, oceans, land, climate, mountains, mines, forests etc. are land.
The payment for land is rent.
Characteristics of Land as a Factor of Production
Types of Land
Labor
All human effort that assists in production is labour. This effort can be mental or physical. It is a human factor of production. It is the worker who applies their efforts, abilities, and skills to produce.
The payment for labour is the wage.
Characteristic
Types of Labor
Capital
Capital refers to all manmade resources used in the production process. It is a produced factor of production. It includes factories, machinery, tools, equipment, raw materials, wealth etc.
The payment for capital is interest.
Characteristics
Entrepreneur
An entrepreneur is a person who brings other factors of production in one place. He uses them for the production process. He is the person who decides
Characteristics
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