FIRST SLIDE

What is Factors of production?

In order to produce goods and services to satisfy needs and wants of consumers we need four basic
things which are called factors of production.

 Anything that assist production is termed as production function.

 But mere existence is not necessarily a factor of production.
 It becomes a factor of production only when it actually assist or contributes to factors of
production.

There are 4 factors of production.

1.) Land
2.) Labour
3.) Capital
4.) Entrepreneurship

SECOND SLIDE

1.) Land
It involves natural resources labor is associated with
human resources, capital includes manmade resources,
and enterprise combines all the three factor, to carry
out the production process.

There are different types of land

 Agricultural
 Horticulture
 Residential
 Commercial and etc
 THIRD SLIDE

2.) Labour Labor constitutes one of the important factors of

production. This factor involves human services and efforts
for the production of goods or services. Labor is commonly
thought of a group of unskilled labor working in factories.
However, in economic terms, a work, physical or mental,
carried out for monetary purpose is called labor.

Types of labour

 Unskilled labour
 Semi-skilled labour
 Skilled labour
 Profession labour

FOURTH SLIDE

3.) Capital In general terms, capital refers to the part of an

individual’s income that is used for Income creation
purposes. Capital is not considered as original factor of
production. In economics, the term capital is associated
with capital goods, such as plant, raw materials, fuel, and
machinery. Among capital goods, raw material and goods
under process are temporary because these goods are
repurchased after a period of time.
 Types of capital
 Fixed
 Working
 Venture

Fifth SLIDE
4. Enterprise:
An enterprise is an entity, organization, or undertaking that is created
for commercial purposes or business ventures and requires efforts. It
is focused on providing goods and services keeping in view various
aspects, such as financial, commercial, and industrial. An enterprise is
composed of individuals and physical assets with a common goal of
generating profits.

Factor of payments for factors of production are:-

As wages are being paid for services of labor, interest is paid for the services of capital,
rent is paid for the services provided by the land and profit is for
the factor of payment to entrepreneurship.