Question

Discuss various factors of production.

Answer 1

Factors of production is meant by anything which helps in the process of production.

Factors of production is classified into four groups-

1) Land - Land not only includes upper surface of the soil, but also includes all other free gifts of nature such as air, water, climate, mountains etc. which are economically useful to man.

2) Labour - Labour refers to all types of human work, physical as well as mental; done with a view to earn income. Work done out of love and affection such as teaching one's own child by a teacher or cleaning one's own car are not considered as labour.

3) Capital - Capital means all man-made durable goods which are used for further production of wealth.

4) Organisation - Organisation refers to the services of an entrepreneur who controls, organises and undertakes all the risks of the business.