economics factor of production

FACTORS OF

PRODUCTION

LEENAVAISH1506@GMAIL.COM

What do you understand by term Production?

What are the various factors

that can be used for agriculture?What are the various factors

that can be used for setting up a new factory?

The purpose of the topic is to introduce some basic concepts relating to production

Factors of production

Land

Labour Capit

al

CONCEPT OF PRODUCTION

Production is defined as the process of converting the input

(raw material) into output. Production may be an activity

that generate income.

LAND

Land is that factor of production which is available to us as a free gift of nature. It not include not only the soil but also other free gift of nature ( like forest, water, natural resources etc.)

CHARACTERISTICS OF LAND

Free gift of nature.

Limited in supply.

Differ in variety.Immobile.Passive factor of

production.Alternative uses.Indestructible.

LABOUR

Labour is the human factor of production and include all the

physical and mental activities which are required in the process of factor

of production.

CHARACTERISTICS OF LABOUR

Human factor.Active factor.Cannot be separated

from labourer.Perishable.Labourers sell his

labour not himself.Difference in

efficiency.Mobile.Weak bargaining

power.More wages less work.

Capital is the stock of produced means of

production.

CAPITAL

Man made factor.

Mobile and transferable.

Depreciates.Passive factor of production.

CHARACTERISTICS OF CAPITAL

TWO ASPECTS OF CAPITAL

HUMAN CAPITAL

PHYSICAL CAPITAL

HUMAN CAPITAL

Knowledge

Life experience

Skills and ability

Creativity

ELEMENTS OF PHYSICAL CAPITAL

FIXED CAPITAL

WORKING CAPITAL

Physical capital

TEST YOUR ABILITY

What is production?What are the various factor of

production?

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How did the spread of

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