Name of the student trainee : Chithra.R Option : Social science Candidate code : 13359004 Year : 2013-2014

Introduction

The labour, natural resources, goods made by human beings used in production are together called as factors of production.

Factors of production

The major factors of production are:

Land Labour Capital Organization

Land

basic factor of production. natural resource. found in the surface and interior of the earth. remuneration of land is called “rent”.

Labour

active agent of production.

human beings are the source of labour

remuneration paid for labour is called “wages”.

Capital

manmade instrument of production are called capital.

eg; machines, factories, computers, building etc.

the reward for the service of capital is called "interest” .

Organization

combination of land, labour and capital for production is called organization.

the reward for this service is called “profit ”

the person who owns the organization is called entrepreneur

Conclusion

Production is possible only through the combined effort of land, labour, capital and organization.

• Text book of standard IX