factors of production

TOPIC 1: BASIC CONCEPTS & POPULATION AND LABOUR FORCE
UNIT 1: FACTORS OF PRODUCTION

  • Factors of production are resources used to produce goods and services: natural resources, labour, capital, and entrepreneurship.

1.1 NATURAL RESOURCES

  • Natural resources are inputs that exist in nature, providing raw materials for production. They are limited, unevenly distributed, and require processing. They can be renewable (e.g., trees) or non-renewable (e.g., minerals).

Economic Importance of Natural Resources

  • Vital for production, job creation, export opportunities, and enhancing human life.

Remuneration of Natural Resources

  • Payment is known as rent, influenced by demand, resource quality, location, population, and climate.

1.2 LABOUR

  • Labour is human effort in production, categorized as skilled, semi-skilled, or unskilled. It is non-storable and limited in mobility, with wages serving as the compensation.

Economic Importance of Labour

  • Essential for production, impacts household income, and contributes to national income.

Remuneration for Labour

  • Includes wages or salaries, dictated by supply and demand.

1.3 CAPITAL

  • Capital includes goods used to produce services, divided into physical and financial capital. It enhances efficiency and drives growth.

Remuneration for Capital

  • Payment is known as interest, affected by investment risk, loan duration, and supply of funds.

1.4 ENTREPRENEURSHIP

  • Entrepreneurs manage businesses, requiring decision-making, organization, and risk-taking. They facilitate production and generate employment.

Remuneration for Entrepreneurship

  • Compensation is profit, influenced by business type, competition, and government policies.

UNIT 2: COMMUNITY PARTICIPATION IN LOCAL ECONOMIC PLANNING

  • Community engagement through elections, forums, media, and demonstrations.

UNIT 3: ECONOMICALLY MARGINALISED GROUPS

  • Includes uneducated individuals, rural residents, disabled persons, and refugees facing access issues.

GOVERNMENT ACTION TO IMPROVE SITUATION OF ECONOMICALLY MARGINALISED GROUP

  • Empowerment and procurement initiatives to provide equal access and opportunities for marginalized individuals.