1.3 Factors of Production

Question 1

What are the factors of production?

Answer 1

• Capital
• Enterprise
• Labor
• Land

Abbreviation to help remember these factors of production : “C.E.L.L”

Question 2

Define the term “Capital” ?

Answer 2

Capital is man made aids to production such as the tools, machinery, and buildings used in production.

Question 3

Define the term “Enterprise” (Entrepreneurship)?

Answer 3

An entrepreneur is an individual that combines the factors of production and takes the risk to create goods and services.

Question 4

Define the term “Labor” ?

Answer 4

Labor refers human effort used in production. This may include :
- Factory workers assembling products.
- Teachers educating students.
- Doctors providing medical services.

Question 5

Define the term “Land”

Answer 5

Land refers to all the natural resources used in production. An example of this could be :
- Agricultural land used for farming.
- Forests providing timber.
- Oil fields extracting crude oil.