Describe the Five Factors of Production

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The Answer is 1. Natural resources include land and raw materials that are found either below or above the ground, such as soil, rocks, minerals, trees, fruits, and vegetables. Raw materials can also include living organisms like fish or agricultural products such as milk and eggs.
2. Labour refers to workers. These are typically employees who contribute their talents and strengths to create goods and services for the owners of a business.
3. Capital includes buildings, machines, tools, and other physical components used in producing goods and services. Money from shareowners, however, is not capital. Money can be used to purchase capital, but money is not capital itself. Money is only an investment, since it cannot create or produce anything on its own to earn income.
4. Knowledge is another factor of production-in fact, it has become the most important factor of production in today's economy. The high-tech industry has created a need for knowledge workers : individuals with specialized education, skills, training, and experience. For many companies, knowledge is the key factor in achieving a competitive advantage.
5. Entrepreneurs are individuals who establish a business in the pursuit of profit and to serve a need in society. They are the owners, decision makers, and risk takers of the business.Unlike their employees, entrepreneurs have no guarantee of income in return for their time and effort.

Describe the Five Factors of Production

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Describe the Five Factors of Production

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