Learn: Factors of Production

Welcome!You've already learned about why businesses exist, the difference between goods and services, and business activities. Now, let's explore the factors of production, which are essential for creating goods and services!

What are Factors of Production?Factors of production are the resources businesses use to produce goods and services. These include land, labour, capital, and enterprise. Each plays a crucial role in the production process.

LandLand includes natural resources like fields, minerals, forests, and water. Businesses use these to create products, such as food grown on farmland or minerals extracted for manufacturing.

LabourLabour refers to the human effort used in production, including both physical and mental work. For example, farmers planting crops or designers creating a new product.

CapitalCapital refers to man-made resources used in production, such as machinery, tools, and buildings. For example, a bakery's ovens or a company's delivery vehicles.

EnterpriseEnterprise involves the entrepreneurial skills needed to organise land, labour, and capital. Entrepreneurs take risks to start and manage businesses, aiming for profit and innovation.

Review Time!Great work! You've learned about the four factors of production: land, labour, capital, and enterprise. Now let's test your understanding with a few questions.