Question

Explain the four requirements for production of goods and services

Answer 1

The following are the four requirements of production:

1. Land: This refers to a piece of land that has all the natural resources such as water, forests, minerals, etc.
2. Labour: Manpower is required to carry out all the tasks. Also, the physical and mental health of the workers need to be taken care.
3. Physical capital: This refers to the investment that is done at every step of production. Fixed capital and working capital are the two classification of physical capital.
4. Enterprise: In order to handle the other three factors of production, enterprise and knowledge are essential. This is known as human capital.