Factors of Production

Factors of Production

by Michaela Graham-Wells

​Review

​Production refers to the creation of goods and services to satisfy our wants and needs.

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​Direct Production occurs when people provide all their own needs themselves. On the other Hand, Indirect production occur when people trade takes place and their needs are satisfy with the cooperation of others.

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There are only scarce resources to satisfy limited resources.

​Factor's Of Production

​The Scarce or limited resources which are used to produce the commodities people want to consume are collectively called FACTORS OF PRODUCTION.

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Multiple Choice

Factors of Production Refers to

• Unlimited wants

• limited resources

• limited wants

• unlimited resources

Multiple Choice

The four factors of production are

• Shelter, Clothing, water and food

• Capital, shelter land, food

• limited resources

• land, labour, capital and entrepreneurship

​The Factors of Production

​Rewards

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Multiple Choice

Land Refers to __

• Gifts of Man

• Gifts from Parents

• Gifts of nature

• Gifts from school

Multiple Choice

Rewards for Labour is

• income

• rent

• profit

• wages

Factor of Production​

Land​

​Land

Land as a factor pf production includes not only the land itself but all natural resources found in the earth and sea​. Land includes mineral deposits such as gold, iron and diamond.​ It embraces sunshine and rainfall, rivers, pond and lakes, deserts and forest. In a sense, Land includes:

​Geographical surface area

​Rivers, lakes and seas

​minerals and chemicals

​Land

​Land is fixed in supply. It can not be increased, although the quality of land can be improved with fertilizer.

​Production can not take place without land

Multiple Choice

Production can take place without land

• true

• false

Multiple Choice

True or False. Land does not include mineral deposits such as gold

• True

• False

Labour

​Labour is the factor of production which is people's physical and mental contribution to the creation of good and services. This factor of production is rewarded with wages.

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​labour

​Labour is divided into three broad categories:

​1. Semi-Skilled & unskilled

​2. Skilled

​3. Managerial and professional

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