Factors of Production

Unit 1.1

#Factors of Production:

1) Land: All the natural resources that include: All the minerals that the earth has, all the layers of the crust on earth, all the trees, vegetation, plants, animals and water bodies are included in land.

2) Labour: All the people that are willing to work both physically and mentally to produce goods and services are labour, without labour the production is not possible.

3) Capital: All the man-made resources that help produce many other goods and services.

4) Enterprise: a firm or a person who combines the three factor of production, Land, Labour and Capital is called as enterprise.

#Producers, Consumer, Needs & Wants, Public Goods:

1) Producer: The person who produces goods and services is called as producer.

2) Consumption: When we use goods and services to satisfy our own wants it is called as consumption

3) Consumer: When people buy goods and services to satisfy their wants they are called as consumers.

4) Consumer Good: The goods that satisfy a consumer want.

5) Consumer Durable & Non-Durable Goods:

a) Durable Goods: The consumer goods that last long eg: Cars & Houses.

b) Non-Durable Goods: the Consume goods that do not last so long eg: Food & Drinks.

6) Consumer Services: When our wants are satisfied by someone doing something for us eg: Doctor & Bankers are called as consumer service.

7) Needs: Are the goods and services that people need for survival eg: cloths and shelter