The Factors Of Production Flashcards
What are the Factors of Production?
The factors of production are general terms for the resources firms need to produce goods and services.
Whether a firm is producing cakes, footballs, cars or movies, they need factors of production.
The factors of production are land, capital, labour and enterprise.
What is Land?
Land are natural resources.
Examples include oil, wood, fish, water.
A fish and chip shop will need fish and potatoes. This is land.
What is labour?
Labour is human resources. A human doing a job is labour.
Examples include teachers, bus drivers, etc.
What is Capital?
Capital is human made resources.
This includes buildings, machinery, laptops, etc.
Human capital is when a human has been invested in. E.g. education and training.
What is enterprise?
Enterprise is the use of the other factors of production to make profits.
Entrepreneurs, such as Elon Musk, take risks and employ land, capital and labour to make goods and services in order to make profits.
