Saturday, February 19, 2011

Factors of Production & Entrepreneurship

Que : Which are the factors of Production?

Ans : Economists have long recognized the four distinct factors that people use to create the things they want.

The Four "factors of production” in Economics are :
i. Land,
ii. Labour,
iii. capital and

Each factor plays a unique role in the production of goods, and each factor is clearly distinguishable from the others.

Land is the passive factor in production.

Labour uses capital on land to produce wealth.

The tangible goods produced by labour, which satisfy human desires and have exchange value is called Wealth.

When labour satisfy desires directly, without providing a material good, we call that "Services".

Thus labour provides the economy with "goods and services".

The process of co-ordinating Land, Labour and Capital for production is known as entreprenuership. The person who takes this ativity is called enterprenuer.

Which are the determinants of Supply

The main six determinants of supply are :

1. Prices of different goods including substitutes
2. Number of suppliers
3. Production function and technology
4. Prices of different inputs including wage rates, interest.
5. Producers' future expectations
6. Government Policies, Duties and Taxes

Other Related Posts  :

Basic Principles of Economics

Factors of Production