![]() If you consider just some of the factors of production involved in baking even a very simple cake, what would happen if one of the four inputs were missing? What if you lacked electricity or an oven? What if you lacked the skills to bake or decorate the cake? What if you had the first three factors of production but not the fourth, entrepreneurship? You can surmise that all four factors of production are required to create the outputs that would get you into the cake business-or any business. ![]() Karl Max, Adam Smith, and David Ricardo, pioneers of various economic theories and concepts, were the masterminds behind the idea of factors of production. Ovens, cake pans, flour, sugar, butter, and other ingredients used to make the cakeĪn individual who starts the bakery or runs a home-based business baking and selling cakes to customers The four factors of production are: land, labor, capital and entrepreneurship. The baker’s labor combined with the creativity and skills needed to actually bake and decorate it While that's true, it isn't the only thing that makes up this factor. The factors of production include natural resources, labor, capital, and entrepreneur. Wind is harnessed to produce electricity that powers the electric mixer and oven. Land When most people think of land, they automatically assume it means agricultural land. The four main factors of production are: Land this is raw materials available from mining, fishing, agriculture Capital This is a manufactured item used to aid production, for example, machines, factories and computers Labour Human workers who are involved in producing the good. \): Factors of Production Natural Resource
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |