WHAT factors of production - Read useful advice

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The factors of production including property distinguish raw materials and capital, human - labor and entrepreneurial ability. All of these factors are interchangeable, due to limited resources. They can be used in various combinations and proportions.

All the factors of production (economic resources) bring profits to its owners in the form of rent (from the ground), interest (of the capital), wages (on labor) and profits (from businesses).

Natural resources



Among natural resources include land, minerals and water resources. It's what nature has provided for the use of man. Natural resources - a feedstock in the production.

Natural factor reflects the influence of nature on the production process and the use of it in natural sources of energy and raw materials. Despite the importance of this factor, it is a passive element production.

Investment sources



Investment resources are also called capital. These include buildings, structures and equipment. Investment resources - it's not just factors of production, but its sources. If the assets (financial resources) are sent into production, they are also called investment.

Capital may be represented in various forms. For example, in the form of plant and equipment that can be connected working capital (current assets). What sways financial capital (securities), it does not apply to the factors of production, as not part of the real economy.

Human resources



Manpower - a separate category of production factors, including the physical and mental abilities of people. The labor factor in the production process is represented by labor of its employees. Combining work with other resources initiated by the production process.

The importance of the labor force in the production process due to the fact that they determine its course and outcome. On the production efficiency of the labor factor affects not only the amount of labor, but also the quality and efficiency of work. That is why, in addition to the labor factor, used in the analysis of such criteria as performance.

Entrepreneurial flair



Entrepreneurial skills - a factor that links all production resources. This ability to competently organize the production process to make better management decisions and innovate in the production and modernize.
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