This document defines production and factors of production. It states that production is the process of converting inputs into outputs in the form of goods and services to satisfy demand. The key factors of production are land, labor, capital and entrepreneurship. It describes land as the natural resources on, below, and above the Earth's surface. Labor is defined as any physical or mental work done in exchange for monetary compensation. The document outlines several characteristics of both land and labor as factors of production, such as land being a passive, immobile natural resource and labor being perishable and heterogeneous.

1. CONTENTS
Meaning of
production
What is factor
of production
Land and its
characteristics
Labour and its
characteristics
PRESENTED BY
• ADITI THAKUR
• KOMAL KUMARI

2.  Production is defined as the process of converting the
input (Raw materials) into output.
It is organized activity of transforming resources into finished
products in the form of goods and services.
And it’s objective is to satisfy the demand of such
transformed resources.
 Production may be an activity that generates incomes.
MEANING OF PRODUCTION

3.  Production is one of the most important economic
activity that takes places in any economy apart
from consumption and investments.
 Production means creation of those goods and
services which have economic utilities. i.e.,
exchange value.
 for example:-
Inputs of sugarcane , capital and labour are used
to produce SUGAR.
 Production also includes production of services
like those of lawyers, teachers, doctors, etc.

4. What are factors of production?
 Anything that assist in production is termed as factor of production.
It becomes a factor of production only when it actually assist or
contributes to production.
Factor of production includes :-
1) LAND
2) LABOUR
3) CAPITAL
4) ENTREPRENEURSHIP

6. LAND
 Generally, land means earth’s surface.
 However, in economics land refers to all the free gifts of
nature i.e. natural resources.
 Land includes natural resources :
 On the surface of earth; E.g. Soil, forest, plots of land, etc.;
 Below the surface of earth, E.g. mineral deposits, etc., and
 Above the surface of earth, E.g. climate, sunshine, rain, etc.

7. CHARACTERISTICS OF LAND
 PRIMARY FACTOR :- Land is the original and primary or natural factor of production. It provides
various natural resources for production.
 FREE GIFT OF NATURE :- Land is the creation of nature and not mane made. It is a free gift of
nature to mankind.
 PASSIVE FACTOR :- Land does not yield only result unless human efforts and capital are
employed.
 LACK GEOGRAPHICAL MOBILITY :- Land cannot be moved bodily from one place to another.
However, land is said to be mobile is the sense it can be put to many alternatives uses.
 LAND HAS MULTIPLE USES :- It can be used for various purposes, though the suitability in all the
uses is not the same.
 For e.g. commercial purpose, agricultural purpose, residential purpose etc.

8. LABOUR
 Labour in economics means any work whether
physical or mental done in exchange for some
monetary reward.
Anything done out of love and affection is not
labour in economic sense.

9. CHARACTERSTICS OF LABOUR
 HUMAN FACTOR :- It is a live factor of production. Hence, labour has feelings and temperament.
So, it is very much affected by surroundings, working, conditions, motivation, recreation, working
hours, etc.
 LABOUR IS PERISHABLE :- Labour cannot be use for future use. It is highly perishable. A day
loss without work means a day’s work gone forever. Hence, labourer has weak bargaining power
and has to accept even low wages.
ACTIVE FACTOR :- Labour is the most active factor of production. Other factors are made
operative with use of labour.
 HETROGENEOUS :- Labour powers differ from labourer to labourer.
Labour powers depend upon physical strength, education, skill, training, efficiency, etc.
Hence, labour can be classified as unskilled, semi skilled and skilled labour.