The document discusses the four factors of production: natural resources, labor, capital, and entrepreneurship. Natural resources are gifts from nature like land, water, animals, and minerals that enable production. Labor refers to a country's workforce, including both physical and mental work. Capital includes money invested in businesses as well as manufactured goods and tools used for further production. Entrepreneurship involves individuals who start businesses and introduce new products, bringing together land, labor, and capital to direct production activities and take on associated risks and decision making. Each factor is compensated differently: natural resources through rent, labor through wages, capital through interest, and entrepreneurship through profits.

1. FACTORS OF PRODUCTION
PROFFECTIONAL STUDIES 3A

2. Concept of production
 Production is defined as the process of converting the input (raw material ) into the out
put.
 Production can be an activity that generate income.

3. The Four Factors of production are
 NATURAL RESOURCES
 LABOR
 CAPITAL
 ENTREPRENEURSHIP

4. NATURAL RESOURCES
 What is the land and examples of land?
o Gifts of nature” that make production possible, including:
 Land
 Water
 Animals
 Minerals

5. Natural resources continued

6. Natural resources continued
 There are six types of natural resources that primary industries supply us with are
 agriculture
 fishing and trapping
 mining
 water
 fuel and energy
 logging and forestry

7. Natural resources continued
 Characteristics of natural resources
 A gift of nature
 Limited in supply
 Land is immovable
 The supply of land involves no opportunity cost

8. labour
o The term “labour” refers to the nation’s workforce. This can include anyone who works
to produce good and services.

9. Labour continued
 Labour includes all of the physical and mental (cognitive) work needed to produce goods
and services. Labour is expensive so most businesses seek ways to save on labour costs.
 Businesses now automate and consolidate to save on labour costs.
 Outsourcing, the hiring of another company to perform tasks for any company, is another
cost saving business option.

10. Labour continued
 Features of labour
 Labour is the human factor
 Active factor
 Labour can not be stored
 No two labour are identical

11. Labour continuned
 Characteristic of the labour
o The quality of labour refers to whether labour is unskilled, semi skilled or skilled
o The quantity of labour :the size of country labour force (working population) depends on
the country total population, school leaving age and retirement age etc..

12. capital
 What is the capital an examples of capital?
 Capital is the money invested in the business. (can be liquid or non-liquid)
 Intellectual property, the ideas or the talent of a business’ workforce, is a non-tangible form of capital.
 The manufactured goods used to make other goods and services.
 Man-made resources used for further production
 Examples: machines, raw materials, tools
 Features:
 Man made
 It raises the productivity of other factors

13. Capital continued
 Characteristics of capital
o Man made factor
o Mobile and transferable
o Depreciates
o Passive factor of production
 Two aspects of capital
o Human capital
o Physical capital

14. Capital continued
 Human capital
o Knowledge
o Life experience
o Creativity
o Skills and ability
 Element of physical capital
o Fixed capital
o Working capital

15. Capital continued
 Examples of the fixed capital
o Plant and machinery
o Factory land and its buildings
o Computing and communication infrastructure

16. Capital continued
 Examples of the physical capital
 Raw materials

17. Capital continued

18. ENTREPRENEURSHIP
 Entrepreneurs are individuals who start new businesses, introduce new products, and
improve a process.
 Is a person who brings in land, labour and capital in one place and uses its for the
production process.
 He or she is the person who decide
 What to produce
 How to produce
 Where to produce

19. Entrepreneurship continued
 The person who takes the decisions along with the risk associated with them is known as
entrepreneur.
 Fictures of entrepreneurship
o He must be a good administrator
o He must possesses the complete knowledge
o He must be the person of imagination
o He must be the man of action.

20. entrepreneurship

21. Factors returns
 Natural resources -rent
 Capital –interest
 Labour –wage
 Entrepreneurship -profit

22. references
 http://www.slideshare.net/vinodsolanki44/factors-of-production-30079919
 http://www.slideshare.net/leena1506/economics-factor-of-production
 http://www.slideshare.net/RonkeSonuga/productionii
 http://www.slideshare.net/ZubairNoorMemon/factors-of-production-economics

23. Hope you all enjoy today economics…