Factors of Production

Anything that aids in production is an element of production. There are a variety of aspects that affect how every resource is converted into a useful product or service.

They are the raw materials for the process of manufacturing. They are the basis of the manufacturing process. Factors that affect production are factors that influence the output of the production.

Types of Factors of Production

Factors that affect production have been classified into four kinds.

Land

It covers the entire range of natural resources. All-natural resources, whether in the vicinity of the Earth, below on the Earth’s surface, or above the surface of the Earth are Land.

The land is used to produce products. It is the main and most natural source of production. Nature’s gifts of all kinds, like oceans, rivers, and climate, as well as land, mines, mountains, forests, etc., are land.

The cost for land is called rent.

Characteristics of Land as a Factor of Production

Nature is the gratuitous natural gift to the Earth.

The land is not a cost of production.

It’s immobile.

The area is fixed and has a limit in its supply.

Types of Land

Residential

Commercial

Recreation

Cultivation

Extraction

Uninhabitable

Labor

Every human effort that helps in the production process is labor. This effort could be physical or physical. It’s a human element of production. The individual puts their effort capabilities, skills, and abilities into creating.

The wage for labor is called the wage.

Characteristic

It’s a human element.

One cannot store labor.

There are no two kinds of work that are alike.

Types of Labor

Unskilled

Semi-skilled

Skilled

Professional

Capital

Capital is the term used to describe all human-made products used in manufacturing. It is a manufactured element of production. It comprises factories, machinery equipment, tools and the raw materials, wealth and so on.

Capital is the principal source of payment. Interest.

Characteristics

Capital is a human-made element of production.

It’s mobile.

This is a passive element of production.

Types of Capital

Fixed

Working

Venture

Entrepreneur

Entrepreneurs are those who integrate other elements of production together. He makes use of them in the process of production. He is the one who determines

What do you need to create

Where can you find the information to make

How to make

Someone who makes these choices and takes on the risk that comes with it is an business owner.

Landowners pay profit.

Characteristics

He has a lot of imagination.

He has a lot of administrative power.

An entrepreneur should be a man of actions.

Entrepreneurs need to have the ability to plan.

He must be an educated person.

He should have a professional approach.

Special Considerations

Although it’s not specifically mentioned as an element in the list, technology plays a significant impact on the production. In this sense technology has a broad definition. It can refer to hardware, software or a combination of both to help streamline manufacturing or organizational processes.

In a growing way, technology is the reason for the differences in the efficiency of companies. Technology, like money, is a facilitator of factors that affect production. Technology’s integration into a capital process improves its efficiency. For instance the use of robots in manufacturing could be a way to boost efficiency and output. In the same way, using kiosks in restaurants that serve self-service can aid businesses in reducing their costs for labor.

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