Factors of production

1.What is the reason people cannot satisfy all their wants and needs?

The reason people cannot satisfy all their wants and needs is the scarcity of productive resources.

2.What are the factors of production?

Factors of production are land, labour, capital, and organization or entrepreneurship.

3.What does the term “ land” mean?

As an economic term land means the gifts of nature or natural, resources not created by human efforts.

4.What do economists think of land as a factor of production?

Economists tend to think of land as being fixed or in limited supply. There is not enough good farmland to feed all of the earth's population enough, sandy beaches for everyone to enjoy, or enough minerals to meet people's expending energy needs indefinitely.

5.What is labor in economic theory?

The second factor of production is labour — people with all their efforts and abilities.

6.What is the national labor force?

Labour is the human input into the production process. It may be mental or physical.

7.What does the size of labor depend on?

Labour is a resource that may vary in size over time. Historically, factors such as population growth, immigration, famine, war and disease have had a dramatic impact on both the quantity and quality of labour.

8.What categories does labor fall into?

Labour may be mental or physical. But in many tasks it is necessary to combine mental activity with physical effort.

9.What kind of work do unskilled workers perform?

Unskilled workers perform physical work.

10.What category do workers with mechanical ability fall into?

Workers with mechanical ability can work as mechanics or study in some technical schools. It helps them to take the positions of managerial levels.

11.What kind of work are skilled workers able to do?

Skilled workers are able to do mental activity mostly.

12.What is professional labor?

Professional labour. Workers with high level skills such as doctors, lawyers and executives of large companies fall into the category of professional labour.

13.What is a wage rate?

The price paid for the use of labour is called wages. Wages represent income to workers, who own their labour.

14.What are factors affecting the wage rate?

Wage depend on how much labour workers spend on activity.

15.What is the third factor of production?

The third factor of production is capital — the tools, equipment and factories used in production of goods and services.

16.What is the difference between physical and financial capital?

Physical capital is also called capital goods and financial capital, the money used to buy the tools and equipment used in production.

17.When does production take place?

When the threee inputs land, labour & capital- are present, production or the process of creating goods & services, can take place.

18.What is entrepreneurship?

Entrepreneurship, the managerial or organizational skills needed by most firms to produce goods and services, is thefourth factor of production

19.What role do the entrepreneurs play?

The entrepreneur brings together the other three factors of production— land, labour & capital