Factors Of Production

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What are 'Factors Of Production'

Factors of production refer to an economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. The factors of production include land, labor, capital and entrepreneurship.

BREAKING DOWN 'Factors Of Production'

In essence, land, labor, capital and entrepreneurship encompass all of the inputs needed to produce a good or service. Land represents all natural resources, such as timber and gold, used in the production of a good. Labor is all of the work that laborers and workers perform at all levels of an organization, except for the entrepreneur. The entrepreneur is the individual who takes an idea and attempts to make an economic profit from it by combining all other factors of production. The entrepreneur also takes on all of the risks and rewards of the business. The capital is all of the tools and machinery used to produce a good or service.

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RELATED FAQS
  1. What inputs are considered to be factors of production?

    Learn what the economic term "factors of production" means, what the four categories of factors of production are and what ... Read Answer >>
  2. Why are the factors of production important to economic growth?

    Find out why the factors of production are critical for real economic growth, where wages rise and consumer goods costs fall ... Read Answer >>
  3. Why do some economists consider entrepreneurship to be a factor of production?

    Find out if entrepreneurship should be considered a factor of production in economic models, and whether or not entrepreneurs ... Read Answer >>
  4. What is 'capital' in relation to the factors of production?

    Find out what economists mean by physical capital, how it contributes to the productivity of labor and why it is a crucial ... Read Answer >>
  5. How do different economic schools of thought treat the factors of production?

    Read about how different schools of economic thought treat the factors of production, both in terms of ownership and macroeconomic ... Read Answer >>
  6. What kinds of productivity data does the Bureau of Labor Statistics keep?

    Learn about the types of productivity data kept by the Bureau of Labor Statistics, including labor productivity and multifactor ... Read Answer >>
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