Question

What are the factors of production?

Answer 1

Factors of production are the inputs that are used to produce goods and services that are demanded in an economy. These are:

• 1.Land: These are the natural resources that are used in the production. As any business will need a place to operate on.
  
• 2.Labour: It is the contribution that is made by humans in the business. They are paid wages or salaries for their inputs.
  
• 3.Capital: It is the money needed to start the business. This money is used to purchase the raw material for the production process.
  
• 4. Entrepreneurship: Entrepreneur who starts the business, organize all the above factors and help in the production process by his skills and risk-taking ability.