Economics

FACTORS OF PRODUCTIONFACTORS OF PRODUCTION

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TOPICS:• INTRODUCTIONINTRODUCTION

• IMPORTANCEIMPORTANCE

• CLASSIFICATION OF CLASSIFICATION OF THE FACTORSTHE FACTORS

• LANDLAND

• LABORLABOR

• CAPITALCAPITAL

• ENTERPRENEURSHIPENTERPRENEURSHIP

• CHARTCHART

• OPTIMUM OPTIMUM COMBINATION OF COMBINATION OF FACTORS OF FACTORS OF PRODUCTIONPRODUCTION

• CONCLUTIONCONCLUTION2

An economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit.

The factors of production include..

Land

Labor

Capital

Entrepreneurship

INTRODUCTION:INTRODUCTION:

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Factors of production are the resources that allow us to create finished products and perform services. You cannot create a product out of nothing.

IMPORTANCE:IMPORTANCE:4

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CLASSIFICATION OF THE CLASSIFICATION OF THE FACTORS:FACTORS: All of these factors of production, without any exception are indispensable for the production because nothing can be produced without these factors. So much, so even any single factor is missing from the process of production, nothing could be produced.

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LAND:LAND:

The word ‘land’ is used as a term in economics. In daily conversation this word refers to the surface on which we live, rivers are flowing, mountains are erected or the jungles are grown.

“All the things are called land whether they

exists on the surface, under the ground or even in the space.”

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ISSUE CONSULTING OF LAND:ISSUE CONSULTING OF LAND:

Currently in Pakistan a lot of land both fertile and barren is unutilized and it should be can into utilization.

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LABOR:LABOR:

Labor is the effort that people contribute to the production of goods and services. Labor resources include the work done by the waiter who brings your food at a local restaurant as well as the engineer who designed the bus that transports you to school.

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ISSUE CONSULTING OF LABOR:ISSUE CONSULTING OF LABOR:

In Pakistan a lot of labor is unemployed and Government should take steps to provide education and training to them along with creating a job opportunities.

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CAPITAL:CAPITAL:

The third factor of production is capital. Think of capital as the machinery, tools and buildings humans use to produce goods and services.

Capital can represent the monetary resources companies use to purchase natural resources,

land and other capital goods.

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ISSUE CONSULTING OF CAPITAL:ISSUE CONSULTING OF CAPITAL:

Pakistan has shortage of capital and technology and Government must take steps to increase capital in the country by giving incentive to local and foreign investor.

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ENTERPRENEURSHIP:ENTERPRENEURSHIP:

An entrepreneur is a person who combines the other factors of production – land, labor, and capital – to earn a profit. The most successful

entrepreneurs are innovators who find new ways produce goods and services or who develop new

goods and services to bring to market.

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ISSUE CONSULTING OF ISSUE CONSULTING OF ENTREPRENEUR:ENTREPRENEUR:

In Pakistan the people have very limited entrepreneurship; therefore, Government must take steps to improve entrepreneurship among people.

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CHART:CHART:Following chart provides brief tabulated information on 4 factors of production.

Sr. No.

Name OfFactors

Owner Of Factor

Reward Of Factor

Nature Of Factor

1- Land Landlord Rent Natural or primary or original factor

2- Labor Laborer Wages Natural factor or primary or human factor.

3- Capital Money Lender Interest Man-made factor

4- Enterprise Entrepreneur Profit Man-made factor

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OPTIMUM COMBINATION OF OPTIMUM COMBINATION OF FACTORS OF PRODUCTION:FACTORS OF PRODUCTION:

F.O.P means land, labor, capital and entrepreneurship. In every business all these factor of production are required but there relative importance's differ. But all the factors of production are necessary.

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CONCLUSION:CONCLUSION:

Hence we can say that no factor is important yet every factor has its own importance. Therefore, production = f1+ f2+ f3 + f4

Therefore, the producers must select proper combination of F.O.P.

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THANK YOUTHANK YOU

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