Labor’s contribution to an economy’s output of goods and services can be increased either by increasing the quantity of labor or by increasing human capital. Land is the natural resource that an enterprise uses to produce goods and services to generate a profit. The four factors of production are inputs used in various combinations for the production of goods and services to make an economic profit. The most successful are innovative risk-takers. Land and labour are also known as primary factors of production as their supplies are determined more or less outside the economic system itself. The four factors of production describe all the inputs or resources that are used in the production of goods and services. The classical factors include land, labor, and capital. Posted on January 1, 2021 by January 1, 2021 by Land is a passive factor whereas labour is an active factor of production. Factors of production are the inputs available to supply goods and services in an economy. Start studying Factors of production. Businesses must constantly upgrade their capital to maintain a competitive edge and operate efficiently. This factor of production includes machinery, tools, equipment, buildings, and technology. Land: Land includes all natural physical resources – e.g. Factors of production are the resources the economy has available to produce goods and services. Entrepreneurship as a Factor of Production Entrepreneurship is the drive to develop an idea into a business. In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, finished goods and services. An entrepreneur combines the other three factors of production to add to supply. Actually, it is labour which in cooperation with land makes production possible. soil, water, air) that can be used in the production process. Factors of Production Definition. Exercise The utilized amounts of the various inputs determine the quantity of output according to the relationship called the production function.There are three basic resources or factors of production: land, labour and capital. natural resources) describes all naturally-occurring resources (e.g. Land (i.e. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Four Factors of Production - A Practical Exercise: The following exercise is designed to help students identify the four factors of production in a real-life context. Factors of Production . The factors of production are land, labor, capital, and entrepreneurship. To put it in different terms, the factors of production are the inputs needed for supply. Factors of production are those agents which help in the production of various goods. The factors of production include land, labor, entrepreneurship, and capital. Economists have expressed different views regarding the number of factors of production. 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