PowerPoint Presentation

Factors of production

ObjectivesDefine factors of production Describe four factors of productionIdentify four factors of production State the payments to the factors of productionClassify factors of production

What are factors of production?Factors of production are the resources used to produce goods and servicesThese resources are also called inputs.

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How many factors of production are there?

There are FOUR factors of production.LandLabourCapitalEnterprise/Entrepreneurship

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LAND

What is land?All the naturally occurring resources (gifts of nature).Land is also called natural resources.

It includes resources found:in the air (oxygen)in the land (gold)

on the land (forests)

in the water (pearls from clams)The payment for land is rent.

Characteristics of landLand is fixed in supplyIt has no cost of productionIt is geographically immobile

Different types of land

Recreation

Extraction

Agricultural

Horticulture

Residential

Uninhabitable

Commercial

LABOUR

What is labour?All human effort whether mental or physical that contributes to productionLabour is also called human resourcesExamples nurses, soldiers, teachersThe payment for labour is called wages

Types of labour

Type of labourExplanation Examples

Skilled

Semi-skilled

Unskilled

Professional

Little or no formal training

Requires some formal training

Requires high levels of training

Requires high levels of education and professional qualifications

Street cleaners

Assembly line worker

Engineers, mason

Doctors, teachers

CAPITAL

What is capital?Capital refers to all man-made resources used in the production processExamples include machineryAndEquipment

The payment for the use of capital is called interest.

Types of capital

Type of capitalExplanation Example

FixedCapital that does not change shape during production

Tractors, machinery

Working

Capital that is used up during production

Cash, materials

Venture

Capital invested at the start up of a business

Cash

ENTERPRISE

What is enterprise?This is the ability to combine or organise the other factors of production and to take risksIt is also called entrepreneurshipThe payment for enterprise is profit

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Examples of entrepreneurs?

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What did I learn today?Write down two things that you learned today