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Beyond Chalk: Education Innovation

Factors of Production

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All the goods and services produced by businesses are produced using four economic resources or factors of production. The four factors of production are:

 

  1. Land and physical found in nature such as water, trees, gas and oil deposits, mineral deposits and soil.
  2. Labour or human resources. These are the employees of the business. Employees are considered to be the most important asset of any business and are the distinguishing factor between any two identical organisations.
  3. Capital or financial resources including machinery, equipment, buildings, factories and transport.
  4. Management or enterprise to provide the knowledge, information and entrepreneurial ability to manage and coordinate the other three resources in the production process.

How these four factors of production are combined will distinguish one business from the next. The skills and expertise of the management team in co-ordinating the resources of the business will largely determine whether it achieves its objectives.

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One thought on “Factors of Production

  1. Pingback: The Economic Problem: relative scarcity | Mr Rouse's Classroom

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