FACTORS OF PRODUCTION
In economics, factors of production are the inputs to the production process. Finished goods are the output. Input determines 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 a production function. 'Factors of production' may also refer specifically to the 'primary factors', which are stocks including land, labor (the ability to work), and capital goods applied to production. Materials and energy are considered secondary factors in classical economics because they are obtained from land, labor and capital. All four factors of production categories are important to the production of goods used in the wants-and-needs-satisfying process that keeps human beings alive from one day to the next and makes living just a little more enjoyable. Land provides the basic raw materials that become the goods. Labor does the hands-on work. Capital is the tools that make the job easier. And entrepreneurship organizes the entire process Land: Dr. Alfred Marshall defined land is meant no merely land in the strict sense of the word, but whole of the materials and forces which nature gives freely for man’s aid in land, water, in air and light and heat. Importance of Land: Land is the original sources of all material wealth. The economic prosperity of a country is closely linked with the richness of her natural resources. All aspects of economic life i.e. agriculture, trade and industry are generally influenced by natural resources which is called as “Land” in economics. The importance of land is therefore too much as it is influencing finally the standard of living of the people. Peculiarities of Land: Land as a factor of production is quite peculiar, it possess some importance feature, they are- 1. Land is free gift of nature: Land is not produced or man-made resource (agent). Therefore, that we have to accept is as it is. It is...
Please join StudyMode to read the full document