2. CONTENTS
1) What is Production.
2) What is Factors of Production.
3) Basic Factors of Production.
• Land and its Features.
• Labour and its Features.
• Capital and its Features.
• Entreprenuer and its Features.
3. What is Production
Production is an outcome of an
economic activity.
Prof. J.R.Hicks defines
Production as "any activity
directed towards the satisfaction
of other peoples wants through
exchange."
4. What is Factors of
Production
1) Anything that assist production is
termed as factor of production.
2) But mere existence is not necessarily
a factor of production.
3) It become a factor of production
only when it actually assist or
contributes to production.
5. What is Production?
Production means, a process by which
resources (men ,material, time etc.) are
transformed into a more useful commodity or
services.
In general, Production means transforming
inputs ( Labour, machines, raw materials, etc.)
into an useful & desired output.
For e.g.
Steel from iron ore,
Legal services like medical, consultancy,
hospitality etc.
7. 1) Land is the original and primary factor of
production.
2) Without land the production process cannot exceed
further.
3) In Economics all the natural resources that are
available –
a) on the surface of the earth
b) below the surface of the earth
c) above the surface of the earth
and which are used in the production process
is called LAND.
8. 1) Land is a free gift of nature.
2) Land has no cost of production.
3) The supply of land perfectly inelastic.
4) Land is subject to Law of DiminishingReturn.
5) Land is immobile.
9. 1) Labour is a human factor of production.
2) In economics labour is defined as- “Economic activity of
man with HEAD and HAND.”
3) LABOUR is human factor of any kind, manual or
mental,skilled or unskilled, scientific or artistic
undertaken with a view of creating or adding utility.
10. 1) Labour is a human factor.
2) Active factor.
3) Labour cannot be stored.
4) No two labours are identical.
11. 1) Capital is a man-made resource of
production used to produce further
wealth.
2) It refers to the stock of capital assets
such as factories,machines, tools &
equipments, raw material, transport
vehicles etc…
3) Therefore capital is defined as “Produced
means of production”
12. 1) Capital is man-made factor
of production.
2) Supply of capital is elastic.
3) Capital has mobility.
4) All capital is wealth but all
wealth is not capital.
Features of Capital
13. 1) Entreprenuer is a person who brings in land,
labour & capital in one place & uses it for the
production process.
2) He is the person who decides-
a) What to produce?
b) How to produce?
c) Where to produce?
3) The person who takes these decisions along
with the risk associated with them is known as
‘Entreprenuer’.
Entreprenuer
14. 1) He must be a good administrator.
2) He must possess complete knowledge.
3) He must be a person of imagination.
4) He must be a man of action.
Features of
Entreprenuer
