...Define and Describe the Four Factors Of Production In every society there are so called 'factors of production,' that are used to manufacture goods and services. These are often referred to as limited resources: The first factor of production is land. This refers not just to land itself but to all natural resources - the surface of the earth, forests, mineral deposits etc... These resources can be split into two different types: non-renewable and renewable. Non-renewable resources are resources such as coal, oil, gold and copper which once used up can never be replaced as their formation took millions of years. Renewable resources include fish stocks, water and wind power and these can be renewed and replaced. However these sources require careful management as misuse can lead to destruction of the source. Some nations are endowed with natural resources and exploit this by specialising in the extraction and production of these resources LAND This category sometimes extends over all natural resources. It is intended to represent the contribution to production of nonhuman resources as found in their original, unimproved form. For the French physiocrats led by Francois Quesnay in the 1750s and 1760s, land was the only factor yielding a reliable gain to its owner. In their view, laborers and artisans were powerless and in excess supply, and hence they earned on average only a subsistence-level income; and in the same way what they produced outside of agriculture fetched enough to...
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...What are the different types of factors of production? Factors of production mean inputs and finished goods mean output. Input decides the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called as "Production Function". All factors of production like land, labor, capital and entrepreneur are required altogether at a time to produce a commodity. In economics, production means creation or an addition of utility. Factors of production can be classified into four categories. Such as: 1. Land 2. Labour 3. Capital 4. Enterprise Factors of production refer to inputs required for conducting production. Input is the starting point of every production activity. According to Prof. Benham, "Anything that contributes towards output is a factor of production." Mere existence of anything doesn't make it a factor of production but its contribution in production process is a necessary condition. Dr. Alfred Marshall described factors of production as "Agents of Production". Cooperation among factors is essential to produce anything because production is not a job of single factor Four Factors of Production in Economics - Chart Following chart provides brief tabulated information on 4 factors of production. * Mention the features of Land, Labor. * Land:- Land is a Natural and primary factor of Production. Land is not created by mankind...
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...182 183 5.1 Factors of production Capital The fi nancial capital used to establish the business earns interest. The interest is paid to thelender, who may be a bank, another institution, or an individual lender. Borrowings of fi nancial capital are called debt._ Fixed capital is capital tied up in fi xed assets, for example buildings, machinery, or vehicles.These assets will have been acquired withfi nancial capital._ Working capital is capital used for day-to-day operation. It includes cash held in the bank,goods for sale, materials for processing and capital for other short-term requirements. Working capital is used to cover wages and immediate requirements, such as utility bills. _ Venture capital is risk capital invested in a new business or one which Irestructuring, usually for a period of years. The venture capitalist hopes to make a large return on investment when the stake in the business is eventually sold, but also risks losing the whole investment.1 Land This means the land itself, and any natural resources that come with it. So oil, natural gas,bauxite, fertile soil, a pleasant climate and sandy beaches are all included in this factor of production. Every business uses some physical space – though, for example, a bank or small home-based business uses much less land than an agricultural business growing sugar. In economic terms, river and marine resources also count as land, for example fi sh, fresh water, or hydro-electric potential from a fast-fl owing...
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...natural resources. Land is usually a limited resource for many economies. Although some natural resources, such as timber, food and animals, are renewable, the physical land is usually a fixed resource. Nations must carefully use their land resource by creating a mix of natural and industrial uses. Labor represents the human capital available to transform raw or national resources into consumer goods. Human capital includes all able-bodied individuals capable of working in the economy and providing various services to other individuals or businesses. This factor of production is a flexible resource as workers can be allocated to different areas of the economy for producing consumer goods or services. Human capital can also be improved through training or educating workers to complete technical functions or business tasks when working with other economic resources. Capital has two economic definitions as a factor of production. Capital can represent the monetary resources companies use to purchase natural resources, land and other capital goods. Monetary resources flow through a nation’s economy as individuals...
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...Assignment one, Mar.28 Instructions 1. What factors contribute to the rapid pace of change in business? Is the pace likely to accelerate or decrease over the next decade? Why? (Your opinion, supported by reasoning, not just a list from the text) A. The factors that contribute to the rapid pace of change in business are human resources, capital, natural resources, entrepreneurship, and technology which all play a factor into a rapid change of pace. The pace is likely to increase because all of these factors are growing rapidly. In my opinion, the pace is likely to increase based on what we have seen in the past years. Just ten years ago we did not have sources like I-phones and drones as advanced as we do now, I-phones can now do many things via your watch. Drones can deliver things to your home by flying, people want faster pace things to make life for them easier and faster. 2. What role does entrepreneurship play in the economy? Who stands to gain from the success of individual entrepreneurs? How do other parties benefit? A. The roles that entrepreneurship plays in this economy are being the key to the economy and its growth. It is my belief that everyone stands to gain from the success of individuals as a nation, and most economies support individual entrepreneurs. The whole economy is going to gain from an entrepreneur starting a business. Other parties benefit by being able to decrease the people they hire in their workplace and not pay as many employees. It...
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...Economics Presentation Topic – The value of Time Production requires labour, land and capital but also time. To account for the role of time in production and costs, we differentiate between the 2 types of time; Short run and Long run. Short run: A time period in which at least one factor of production is fixed. We assume that the quantity of machinery is fixed however; production can be altered, by changing variable factors such as, labour and raw materials. In the short run, demand is likely to be more inelastic as consumers are used to consuming goods/services out of habit or they maybe necessities.. Long run: A period in which all factors including capital can be changed. In the long run, producers look for an output that combines labour and capital in a way that increases efficiency and reduces costs. In the long run, when they realize that price is rising, they might look for alternatives. Example: 1. If a firm like Microsoft increases the price of Windows operating system; in the short run, demand is likely to be inelastic – consumers are used to using windows so they may continue to pay a higher price However, in the long run, consumers may get fed up with paying higher prices for windows and they may consider switching systems 2. If the price of gasoline increases; in the short run, demand will be inelastic because it will be considered a necessity and therefore a change in price will not create a large change in quantity demanded...
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...the short-term, the supply of the product can be increased to meet the demand. Shelly had already taken the necessary steps to meet the rising demand of her product, by expanding operations and borrowing money in order to increase her staff. In order to meet the increasing demand in the short-term, Shelly could consider another expansion and find the financial means to increase her staff so she will be able to keep up the supply of the product. I think the price of Shelly’s pies will increase in the short-term, causing the demand for her product to either decrease or remain the same. The supply of the product in the long-term will increase if Shelly is able to find the financial resources necessary to expand and keep up with the production of the product. With expansion, the price of the product will increase in order for the company to continue making a profit. Demand...
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...For students doing the topic: Establishing a Business: Production 1. Description of business – In this part you are required to give a brief description of your intended business. The examiner should (a) The name of your intended business e.g. Xtreme Graphics production (b) The type of business e.g. sole, proprietorship etc. (c) What is the proposed business engaging in? e.g. production of local fruit juices (d) The major aims or aims of your business e.g. To make 100% profit by ensuring customer’s satisfaction. (e) If possible you can give example(s) of the goods and/ services you will be producing. 2. Justification of location– in this part you are required to : (a) State the location of your intended business, e.g. 152 John Street (b) Secondly, you will have to list and explain the factors which influence your choice of location. (Check your textbook) e.g. Closeness to raw materials. 3. Selection of appropriate labour– as we already know labour is an important of production and if you don’t select the most appropriate type of labour then inefficiency would take occur and productivity will decline. You are required to” (a) List the type of labour you will enjoy employ. e.g. cleaner (b) Then classify them under the three main categories of labour namely: – Skilled – Unskilled – Semi-skilled 4. Sources of fixed and working capital– Capital refers to money and all other assets of...
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...Determinants of Productivity Determinants of Productivity Productivity is the quantity of output formed by one unit of production input in a unit of time. Inputs used in the production of the goods and services are the major determinants of any country’s productivity they are also called factors of production. There are four major determinants of productivity of any country’s economy. · Land: the land itself, and raw materials such as oil and minerals beneath it. The natural resources that is available without alteration or effort on the part of humans. Land as a resource includes only unique fertility and mineral deposits, topography, climate, water and vegetation. Trees grown are not categorized as land because they have been deliberately grown on the other hand Trees in a natural rainforest are a natural resource and thus classify as land. The reward for letting others use land is called rent. · Labor: In order to produce the things, a human resource must be used. human resources consist of the productive aid of labor made by individuals who work—for instance, miners, artists, and professional baseball players. The contribution of labor to the production process can be amplified. Whenever potential workers obtain schooling and training and whenever actual workers acquire new skills, labor’s contribution to productive output will raise. In other words it is human effort, mental or physical. The reward to labor is label wages. · Capital: When labor is applied...
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...choice of region and the selection of a particular site for setting up a business or factory. But the choice is made only after considering cost and benefits of different alternative sites. It is a strategic decision that cannot be changed once taken. If at all changed only at considerable loss, the location should be selected as per its own requirements and circumstances. Each individual plant is a case in itself. COMPANY should try to make an attempt for optimum or ideal location. What is an ideal location? An ideal location is one where the cost of the product is kept to minimum, with a large market share, the least risk and the maximum social gain. It is the place of maximum net advantage or which gives lowest unit cost of production and distribution. For achieving this objective, small-scale entrepreneur can make use of locational analysis for this purpose. LOCATIONAL ANALYSIS Locational analysis is a dynamic process where entrepreneur analyses and compares the appropriateness or otherwise of alternative sites with the aim of selecting the best site for a given enterprise. It consists the following: (a) Demographic Analysis: It involves study of population in the area in terms of total population (in no.), age composition, per capita income, educational level, occupational structure etc. (b) Trade Area Analysis: It is an analysis of the geographic area that provides continued clientele to the firm. He would also see the feasibility of accessing the trade...
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...Oriel John S. Gomez BSBM I - B The factors of production are resources that are the building blocks of the economy; they are what people use to produce goods and services. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. • Land - this includes any natural resource used to produce goods and services. This includes not just land, but anything that comes from the land. Some common land or natural resources are water, oil, copper, natural gas, coal, and forests. Land resources are the raw materials in the production process. These resources can be renewable, such as forests, or nonrenewable such as oil or natural gas. The income that resource owners earn in return for land resources is called rent. • Labor - is the effort that people contribute to the production of goods and services. Labor resources include the work done by the waiter who brings your food at a local restaurant as well as the engineer who designed the bus that transports you to school. It includes an artist’s creation of a painting as well as the work of the pilot flying the airplane overhead. If you have ever been paid for a job, you have contributed labor resources to the production of goods or services. The income earned by labor resources is called wages and is the largest source of income for most people. • Capital - Think of capital as the machinery, tools and buildings humans use to produce goods and services. Some common examples of...
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...Problems in developing small scale enterprises in Bangladesh There are a huge number of problems in the question of developing small scale enterprises in Bangladesh, which are discussed below: Individuality: Maximum small scale enterprises are owned by the individuals and an individual has obviously some limitation. Lower Per Capita Income: Per capita income of our people is low and for this reason our people are not being able to generate adequate capital to run the business efficiently. Unskilled Human Resources: Human resources of our country are not skilled this is a problem with developing small scale enterprises in Bangladesh. The economic environment of our country is not hundred percent suitable for operating the business another cause of the restrictions. Excessive import of foreign product: Excessive import of foreign product in our country is another reason cause when the people of the country will be mainly dependent on the imported product then the entrepreneurs will loose their interest to develop small scale enterprises. Political instability: Political instability of our country is another reason for developing the small scale enterprises rate slow. Political environment of our country is not suitable enough to run the efficient business in our society. Deterioration of Morality: Public moral is getting down means most of our people are loosing their moral and for this reason developing small scale enterprises in Bangladesh is not so easy like the other...
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...In economics, derived demand is demand for a factor of production or intermediate good that occurs as a result of the demand for another intermediate or final good.[1] In essence, the demand for one is dependent on that whose demand its demand is derived from. For example, if the demand for a good such as wheat increases, then this leads to an increase in the demand for labour. For another example, demand for steel leads to derived demand for steel workers, as steel workers are necessary for the production of steel. As the demand for steel increases, so does its price. The increase in price means manufacturers of steel can gain more in revenue if they produce more steel, thus leading to a higher demand for the resources involved in producing steel.[1] Demand for transport is another good example of derived demand, as users of transport are very often consuming the service not because they benefit from consumption directly (except in cases such as pleasure cruises), but because they wish to partake in other consumption elsewhere.[1] Derived demand applies to both consumers and producers. Producers have a derived demand for employees. The employees themselves do not appear in the employer's utility function; rather, they enable employers to profit by fulfilling the demand by consumers for their product. Clearly, the demand for labour is a derived demand from the demand for goods and services. Another example is farm production and the demand for fertilizer. The demand for...
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... . . . . . . . . . . . 33 1. 2. 3. 4. 5. 6. 7. Economics and the Abolition of Profit . . . . . . . . . 33 The Consequences of the Abolition of Profit . . . . 34 The Antiprofit Arguments . . . . . . . . . . . . . . . . . . . 37 The Equality Argument . . . . . . . . . . . . . . . . . . . . . 40 Communism and Poverty . . . . . . . . . . . . . . . . . . . 43 The Moral Condemnation of the Profit Motive . . 47 The Static Mentality . . . . . . . . . . . . . . . . . . . . . . . 50 C. The Alternative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 5 A. THE ECONOMIC NATURE OF PROFIT AND LOSS 1. The Emergence of Profit and Loss In the capitalist system of society’s economic organization the entrepreneurs determine the course of production. In the performance of this function they are unconditionally and totally subject to the sovereignty of the buying public, the consumers. If they fail to produce in the cheapest and best possible way those...
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...Dylan Pena A post capitalistic world with money as the currency there is no limit on how much you can have of it. Thus making it priority one for the means to sustain life. Others with greed and big businesses that make their money with profit or so called capital. Starting with the three easy steps or so essentials to start witch are land labor and capital, but there is one additional step to that process which is knowledge. This is where the professional workers or brain workers if you will. That have and now taken over the capitalist way. Making it a world of professionals pro workers for short making the big dollars as well as fixing there pay for them and third other fellow pro workers. Knowledge one of the most powerful tools the human has, it is the source of all power. In this world how to make a tremendous amount of money. 1981 numbers showing that the working class growing hugely in the numbers in soviet Russia 75% of the work force were the non-labor pro workers. Making its way to the United States with increasing numbers the jobs more desirable but a scarcity of where the high paying jobs. Where are we going with this well that like earlier the more knowledge you have the more power to you? Well knowing how things work to get the connection to get those jobs that fit the criteria for a brain worker rather not to end up as a drudge worker digging ditches. Working the way to the top of the corporate ladder, not minding those below. Why not, well because even though...
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