Course- EMBA 505
Department of Management Studies
Md. Masudur Rahman Id: - 120205018
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
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 is a Natural and primary factor of Production.
Land is not created by mankind but it is a gift of nature. So, it is called as natural factor of production. It is also called as original or primary factor of production. Normally, land means surface of earth. But in economics, land has a wider meaning, take a good look at the following picture:
From the above picture it is clear that land includes earth’s surface and resources above and below the surface of the earth. It includes following natural resources:- a. On the surface (e.g. soil, agricultural land, etc)
b. Below the surface (e.g. mineral resources, rocks, ground water, etc.) c. Above the surface (e.g. climate, rain, space monitoring, etc.)
Features of Land:-
1. Land is a free gift of nature:-
Land is a free gift of nature to mankind. It is not a man-made factor but is a natural factor. 2. Land is a primary factor of production:-
Though all factors are required for production, land puts foundation for production process. Starting point of production process is an acquisition of land. So, it is primary factor. 3. Land has perfectly inelastic supply:-
From society’s point of view, supply of land is perfectly inelastic i.e. fixed in quality. Neither it can be increased nor decreased. Simply, you can not change size of the earth. But from individual point of view, its supply is relatively elastic. 4. Land has grad ability :-
Land varies from region to region on the basis of fertility. Some lands are more fertile and some are not at all. So, fertility wise, grading of land is possible. So, in this way, land has grad ability. 5. Land is a passive factor:-
Land itself doesn’t produce anything alone. It is a passive factor. It needs help of labour, capital, entrepreneur, etc. like labour and entrepreneur, it doesn’t work on its own initiative. So it is a passive factor. 6. Land may have diminishing returns:-
Here, return means quantity of crops. By using fertility of land with the help of capital and labour continuously, returns get diminished because of reduction in fertility. 7. Land has a derived demand:-
Demand for agricultural goods is a direct demand and producing such goods, land is indirectly demanded. So, as a factor, land has a...