ZAMOKUHLE MNCWABE 201220884
ZAMOKUHLE MNCWABE
201220884
FACTORS OF
PRODUCTION
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?
Factors of production
Land
Labour Capit
al
ENTREPRENEURSHIP
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 is the human factor of production and include all the physical and mental
activities which are required in the process of factor of production.
LABOUR
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
Wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing
• 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
ENTREPRENEURSHIP
• A person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.
Characteristics of Entrepreneurs
• A constant flow of ideas.
• A forward-looking approach.
• The desire to be an expert.
• Open-mindedness.
• An unwavering passion.
REFERENCE LIST
BDM High School, Ambala. 2014. available from: http://www.slideshare.net/leena1506/economics-factor-of-production?qid=f4d69b2c-6d53-4995-a8b3-d6d61a258c77&v=default&b=&from_search=1Sarjoon2007. 2014. available fromhttp://www.slideshare.net/sarjoon2007/factors-of-production-9978899?qid=f4d69b2c-6d53-4995-a8b3-d6d61a258c77&v=default&b=&from_search=6Klein T. 2012. available fromhttp://www.slideshare.net/misterklein/tues-factors-of-production?qid=f4d69b2c-6d53-4995-a8b3-d6d61a258c77&v=default&b=&from_search=3