Factors of Production

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Factors of Production

By | Feb. 2013
Page 1 of 4
Factors of Production
1. Land
2. Labor
3. Capital (Money) is not actually considered as capital in economics as it does not produce a good and service but it is rather a form of asset that is used as a medium of exchange. 4. Entrepreneurship

The 3 E’s in ECONOMICS
1. Efficiency refers to productivity and proper allocation of economic resources. 2. Equity means justice and fairness.
3. Effectiveness means attainment of goals and objectives.

Types of Economic Systems

To address economic problems, several economics systems have been created and applied throughout history.

Traditional Economy -is basically subsistence (survival)economy.

Command Economy- a type of economy wherein the manner of production is dictated by the government.

Market Economy
- or capitalism’s basic characteristic is that the resources are privately owned, and that the people themselves make the decisions.

Socialism
is an economic system wherein key enterprises are owned by the state.

Socialism is considered as an economy bordering between capitalism and communism.

Mixed Economy
-is a mixture of market system and the command system.
THE BASIC ECONOMIC QUESTIONS
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What is to be produced?
Refers to the kinds and quantities of goods and services to be produced refers to the level or degree the available resources to be utilized in the production process.

How is it to be produced?
Refers to the combination of various resources and the techniques to use in production.

Who is to receive it?
Refers to how to divide up what has been produced among consumers in the society.

How should a system be adapted to change?
Refers to how the economic system can make significant reallocations of resources in order to preserve efficiency in their use. .

THE BASIC ANALYSIS OF DEMAND AND SUPPLY

DEMAND
The quantity of a good or service that people are ready to buy at a given prices within a given time period. SUPPLY
the quantity of good and...