ZAMOKUHLE MNCWABE

201220884

FACTORS OF

PRODUCTION

What do you understand by term Production?

What are the various factors

that can be used for agriculture?What are the various factors

that can be used for setting up a new factory?

Factors of production

Land

Labour Capit

al

ENTREPRENEURSHIP

CONCEPT OF PRODUCTION

Production is defined as the process of converting the input

(raw material) into output. Production may be an activity

that generate income.

LAND

Land is that factor of production which is available to us as a free gift of nature. It not include not only the soil but also other free gift of nature ( like forest, water, natural resources etc.)

CHARACTERISTICS OF LAND

• Free gift of nature.

• Limited in supply.

• Differ in variety.

• Immobile.

• Passive factor of production.

• Alternative uses.

• Indestructible.

Labour is the human factor of production and include all the physical and mental

activities which are required in the process of factor of production.

LABOUR

CHARACTERISTICS OF LABOUR

• Human factor.

• Active factor.

• Cannot be separated from labourer.

• Perishable.

• Labourers sell his labour not himself.

• Difference in efficiency.

• Mobile.

• Weak bargaining power.

• More wages less work.

CAPITAL

Wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing

• Man made factor.

• Mobile and transferable.

• Depreciates.

• Passive factor of production.

CHARACTERISTICS OF CAPITAL

TWO ASPECTS OF CAPITAL

HUMAN CAPITAL

PHYSICAL

CAPITAL

HUMAN CAPITAL

Knowledge

Life experience

Skills and ability

Creativity

ELEMENTS OF PHYSICAL CAPITAL

FIXED CAPITAL

WORKING CAPITAL

http://www.google.co.in/url?sa=i&rct=j&q=fixed+capital&source=images&cd=&cad=rja&docid=VQHTsBv4Kiu2YM&tbnid=l66U7LFH1Odn4M:&ved=0CAUQjRw&url=http://kalyan-city.blogspot.com/2012/06/what-is-fixed-capital-definition.html&ei=-bGIUejSMtHyrQfshoGoDw&bvm=bv.45960087,d.bmk&psig=AFQjCNEWlsLy3sDoBf0qjoLjvAdCTuwJKw&ust=1367999342667568

Physical Capital

ENTREPRENEURSHIP

• A person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.

Characteristics of Entrepreneurs

• A constant flow of ideas.

• A forward-looking approach.

• The desire to be an expert.

• Open-mindedness.

• An unwavering passion.

REFERENCE LIST

BDM High School, Ambala. 2014. available from: http://www.slideshare.net/leena1506/economics-factor-of-production?qid=f4d69b2c-6d53-4995-a8b3-d6d61a258c77&v=default&b=&from_search=1Sarjoon2007. 2014. available fromhttp://www.slideshare.net/sarjoon2007/factors-of-production-9978899?qid=f4d69b2c-6d53-4995-a8b3-d6d61a258c77&v=default&b=&from_search=6Klein T. 2012. available fromhttp://www.slideshare.net/misterklein/tues-factors-of-production?qid=f4d69b2c-6d53-4995-a8b3-d6d61a258c77&v=default&b=&from_search=3