Factors of Production & Basic Economic Problems

Soc Sci

Factors of production or production inputs

These are the resources or things that we use to produce goods and services. Anything produced in the economy must come from a combination of those resources.

Land, labor, capital & entrepreneurs

What are the factors of production?

Land

This consists of the physical space on which production takes place, including all other natural resources found under it or on it.

Labor

It is the time human beings spend and/or the number of persons needed to produced goods and services.

Capital

These are long-lasting resources that aid in the production process.

Physical capital (tools, machines), human capital (skills, knowledge)

What are the two types of capital?

Entrepreneurs

These are the people who organize production and operate business organizations. They are responsible in making the major business decisions in firms and they are considered as innovators in the economy.

What to produce?, How to produce?, For whom to produce?

What are the three basic economic questions?

economic system

The way societies answer the three questions is varied and largely dependent upon their choice of ______________.