There are four factors of production. These factors are land, labor, capital, and entrepreneurship. Land refers to the place where buildings are constructed and where resources can be found. Labor refers to those individuals who are doing the work. Capital refers to the money that is needed to invest in something or to start a new business. Capital includes the machines needed to run a business as well as the buildings themselves. Capital is needed for an economy to grow. Finally, the last factor of production is entrepreneurship. People have to develop ideas and be willing to take risks. Without this spirit of entrepreneurship, there would be few new ideas and few improvements in ways of doing business. Each factor of production is necessary for an economy to grow, to develop, and to hopefully prosper.
No comments:
Post a Comment