![]() ![]() Land or natural resource - naturally occurring goods like water, air, soil, minerals, flora and fauna that are used in the creation of products.Adam Smith and David Ricardo referred to the “component parts of price” as the costs of using: The classical economics of Adam Smith, David Ricardo, and their followers focuses on physical resources in defining its factors of production, and discusses the distribution of cost and value among these factors. Capital is made up of all of the tools and machinery used to produce a good or service. The entrepreneur also takes on all of the risks and rewards of the business. The entrepreneur is the individual who takes an idea and attempts to make an economic profit from it by combining all other factors of production. Labor includes all of the work that laborers and workers perform at all levels of an organization, except for the entrepreneur. Land represents all natural resources, such as timber and gold, used in the production of a good. At the core, land, labor, capital and entrepreneurship encompass all of the inputs needed to produce a good or service. These production factors are also known as management, machines, materials and labor, and knowledge has recently been talked about as a potential new factor of production.įactors of production include any resource needed for the creation of a good or service. ![]() The factors of production include land, labor, capital and entrepreneurship. Factors of production is an economic term that describes the inputs that are used in the production of goods or services in order to make an economic profit. ![]()
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