education

1. A presentation on
FACTORS OF PRODUCTION
Created By :
Ms Endang
Nainggolan

2. Production

3. Factor of production
Meaning-
Basic factors of production
land
labour
capital
entrepreneurship

4. “Thematerials andtheforces which nature gives free
for man’s aid,in land and water and in air, light and
heat”
-Marshal
LAND

5. Characteristics
Freegiftofnature Limitedsupply
Immobile
Primary
factorof
production

6. Labour
In economics labour is used to refer to all
physical and mental contribution of an
employee

7. Characteristicsoflabour
Inseparable
from labourer
Labourer is a
human being and
not a machine
Labour is
Perishable
Less mobility
of labour
Labour
creates
capital
Increase in wages
may reduce the
supply of labour

8. Capital
Capital is that part of wealth which is used
for production
“Capital consists of all kinds of wealth,
other than free gifts of nature, which
yield income.” Therefore, every type of
wealth other than land which helps in
further production of income is called
capital.”
Marshal

9. Characteristics
Capital is a produced means of production
Capital depreciates
Passive factor of
production
Man made factor

10. Entrepreneurship
Entrepreneurship is the process in which the
entrepreneur scans the environment, grabs the business
opportunity, allocates various resources and raw
materials that includes land, labour, capital and
undertakes the production process.

11. Characteristic
s
Systematic activity Risk taking
Innovation and creativity Lawful activity

12. Mobility, Quantity and Quality of factors
of production
 Land
Many types of land can have their use
changed ( Occupational Mobility) Land
use can change from farming to urban
construction, or from Forest resources to
agriculture
 Labour
Incentives, to encourage workers to move
and to cover higher cost of living

13. Continue..
 Capital
Capital become obsolete, replaced by more modern
versions over time
 Enterprise
Restricted internationally by citizenship and
passport restrictions, or by specific knowledge
required by specialist industries

14. Quantity and Quality factors of
production
High quality of production the following :
 Skilled labour force
 Highly productive land
 Highly productive capital
 Highly productive enterpreneur