What are factors of Production?
Resources available on earth to make goods and services to satisfy our needs and want are limited.
In economics, factors of production (or productive inputs) are the resources employed to produce goods and services. These can be categorised as
- Land (natural resource) - natural resources used in the creation of products, paid in economic rent, because they are simply irreproducible.
- Labor - human efforts provided in the creation of products, paid in wage.
- Capital goods - human-made goods or means of production (including machinery, building and so forth) used in the production of other goods, paid in interest.
- Enterprise – is the organising and risk-taking factor of production. An entrepreneur brings together land, labour and capital to produce goods and services and is paid in profit.
Detailed notes on factors of production
