Meaning of factors of Productions
For the activities of production to take place, factors must be available.These are the things that make the production of goods and services possible; hence they are called factors or agents of production. They are;
- Capital and
These factors supply the money, physical effort, land or place of business and managerial expertise (i.emanagement ability) to enable the making of goods and supply of services possible.
Does not only mean the surface of the earth but also all the natural resources and free gifts of nature available and used in the production process.
Importance of Land
- It is for extraction of mineral resources
- It is used for erection of residential or office buildings
- The reward for land is rent
- It is useful for farming, food production and animal husbandry
- It helps in the generation of income such as rent, royalties , etc
FEATURES OR CHARACTERISTICS OF LAND
- It is a gift of nature
- It is a place where industries are sited
- The price of land varies according to its location and demand
- Unlike other factors of production, land cannot be moved from one place to another.
This is all human efforts physical or mental, directed towards the creation of goods and services. The reward to labour for its contribution in production process is salary or wages.
IMPORTANCE OF LABOUR
- Physical or mental efforts of man brings about a means of living.
- Labour aids career development
- Labour helps people to move from one job to another and from one place to another
- The collective efforts of people helps in national development.
FEATURES OF LABOUR
- It is the human effort in production process
- Labour is rewarded with salary or wages
- Labour can move from job to job and from place to place.
- Labour can specialize in given areas
- The trained labour is the specialized labour and is the expensive
This is wealth set aside for the production of further wealth. Capital can be in the form of machine money, property or equipment used is starting a business.
IMPORTANCE OF CAPITAL
- Money aspect of capital helps in providing materials for production.
- It makes assessment possible, by making comparison.
- Capital attracts investors into the business.
- It makes every aspect of production activity possible
FEATURES OF CAPITAL
- It is made by man
- It is scarce
- Capital as money is difficult to earn
- The reward to capital for contributing to production is interest
ENTERPRENEUR OR ORGANIZATION
This factor of production arranges, directs and controls the other factors to make production possible. He plans the number or quantity of other factors required for production. The reward of the entrepreneur in production effort is profit.
IMPORTANCE OF ENTERPRENEUR
- He brings the capital (i.e money), machine equipment and hires the labour needed for production.
- He decides what to produce and how to produce.
- He bears the risks connected with production.
- He controls and supervises the contribution of the other factors of production
FEATURES OF THE ENTERPRENEUR
- He brings the capital for the business
- He determines what to produce
- He employs labour required
- List the four factors of production
- What is their respective rewards in production process?
- Define each of the factors of production
- List these factors and their rewards
- What factor arranges the others?
- What factors is made by man?
- Which factor is a gift of nature?
WEEKEND ASSIGNMENT – SECTION A
- ________factor receives the reward of interest. A. Land Labour C. Capital D. Enterpreneur
- Factors of production are also called ________ of productionA. agents owners C. givers D. friends
- The factors that are provided by God and by man are rewarded with _____ and ______ according by A. wages and profit B. rent and wages C. rent and interest D. Profit and salaries
- _____ is defined as all the physical and mental efforts of man in production
- capital B. Labour C.Enterpreneure D. Land
- _____ is defined as wealth set aside for the production of more wealth
- Land Labour C. Capital D. Enterpreneur
- List three (3) importance of each factor of production
- List two (2) features of each of the factors of production.