Economics: Factors of production

1. NELC
•Natural Resources
•Entrepreneurship
•Labour
•Capital

2.  In order to produce goods and services to
satisfy the needs and wants of consumers
ne need four basic things which are called
factors of production.

3.  Fixed in supply
 Cannot be renewed
 Found in nature
 E.g. Oil, water,
marine life, forests etc

4.  Definition : All the things that we find in nature
without having to produce them
 Example: Water, Minerals, Land, Forest,
Animals and Plants.
 Remuneration: Rent

5.  Brings all the factors of production together in a
profitable way
 Characteristics of an
entrepreneur
Trustworthy
Enthusiastic
Risk taker
Professional
Honest
Hard working
Energetic
Passionate

6. Definition: an entrepreneurship combines all
the factors of production to produce goods
and services.
Example: A person who is willing to take risks
and is motivated.
Remuneration: Profit

7.  The mental and physical effort of people
involved in a business

8. Definition: All the physical and mental effort used
to create goods and services. Physical labour
involves using your body and physical ability and
mental labour involves using your mind and
mental ability to get something done.
Example: Mineworkers and teachers
Remuneration: Wages or salaries

9.  Does not include money
 Manufactured resources e.g. machines,
tools, and buildings (capital goods)
 Capital goods are needed to produce goods
and services

10. Definition: Capital goods used to produce other
goods and services. It can also mean the actual
money used to start a business.
Examples: Machines, Tools, Factory buildings,
Office buildings and trucks.
Remuneration: Interest

11. Els, G., Ngwenya, L., Oliver, E., & Pretorious,
E. (2012). Enjoy Economic and management
science Grade 9 Learner’s book. (M.
Bezuidenhout, Ed.) Sandton: Heinemann
Publishers (pty) Ltd.