Factors of Production - SS1 Economics Lesson Note

Factors of production refer to the resources needed for the production of goods and services. The four main factors of production are:

a. Land: This refers to all natural resources, including soil, water, forests, and minerals, used to produce goods and services. Land can also include the location of a business or organization and its access to natural resources.

b. Labor: Labor refers to the physical and mental effort put in by workers to produce goods and services. This factor of production can include both skilled and unskilled workers and is essential for the production process to function.

c. Capital: Capital refers to the physical and financial assets used in the production process, such as machinery, equipment, and buildings. Capital can be either human-made or natural and can include resources such as coal and oil.

d. Entrepreneurship: Entrepreneurship refers to the ability to combine land, labor, and capital to create and produce goods and services. This factor of production includes the ability to take risks, innovate, and make decisions that impact the production process. Entrepreneurs can create new businesses and products that can drive economic growth and innovation.