FACTORS OF PRODUCTION
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WHAT IS FACTOR OF PRODUCTION


Factors of production refer to the resources or components which are combined to produce goods and services. There are four factors of production.


The four factors of production are:

  1. Land
  2. Labour
  3. Capital
  4. Entrepreneur

 

  1. Land – land is commonly defined as a free gift of nature. Land does not include only land surface of the earth but all other free gifts of nature or natural resources on it like, forest, rivers, mineral resources, etc. unlike all other factors of production, the supply of land is limited and the reward for land is rent.

Features of land

  1. Land is immobile
  2. Land is a free gift
  3. Variability
  4. Rent
  5. Land is heterogeneous
  6. Land is subject to diminishing returns
  7. The supply of land is fixed
  8. Land has no cost of production
See also  Public Policy

Importance of land

  1. Transportation purposes
  2. Sources of mineral resources
  3. Construction purposes
  4. As collateral security
  5. Construction purposes
  6. Social or recreational purposes
  7. Farming purposes
  8. Livestock purposes
  9. Fishery purposes
  10. Wild life purposes

What is Labour?


Labour can be defined as human effort put into production, it can also be defined as mental or physical effort human use in the process of production. The rewards of Labour as a factor of production comes in form of wages and salaries.

Types of labour

  1. Skilled
  2. Unskilled

 

  1. Skilled: skilled Labour are the one who make use of their mental effort in productive activities. They are type of Labour that have undergone training in institution of higher learning, they are full of idea. They usually hold administrative Nd managerial positions e.g. manager, teachers, doctors, lawyer, account etc. Skilled Labour job is popularly refers to as “white collar job”.
  2. Unskilled Labour: unskilled Labour are Workers that put physical effort or energy in production. Unskilled Labour requires little or no formal education, their job is popularly referred to as “brown collar job” As the result of low education they are usually employed as gardener, guards, messengers, cleaners in companies and other places of employment. In conclusion unskilled Labour are mostly controlled and directed by the skilled Labour.
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Features of Labour

  1. Labour is immobile
  2. Labour has feelings
  3. Labour is skillful
  4. Labour is a human factor
  5. Labour requires motivation
  6. Labour is not fixed
  7. Labour is perishable
  8. Labour is not predictable
  9. Labour control other factors of production
  10. Labour has initiative

Importance of Labour

  1. Provision of personnel
  2. Production of goods and services
  3. It influences other factors of production
  4. Operation of machines

Read more : what is capital

Read more : what his entrepreneur/ who are entrepreneur

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