Post on 04-Jun-2018
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Economists have long recognized the three distinct factors that
people use to create the things theywant and that are referred to as
"factors of productionwhich are as follows :
Land
Labor
Capital Each factor is plays a unique role in the production of goods, andeach factor is clearly distinguishable from the other two.
!L#$ :
%or Economic purposes, Land refers to all #atural &esources
E'amples:
(inerals
)imber
&eal Estate
* E'planation:
Land is defined as everything in the universe that is not created
by human beings. +t includes more than the mere surface of the earth.
ir, sunlight, forests, earth, water and minerals are all classified as
land, as are all manner of natural forces or opportunities that are not
created by people. Labor uses capital on land to produce wealth. Every
tangible good is made up of the raw materials that come from nature !!
and because all people and other living things- have material needs for
survival, everyone must have access to some land in order to live.
!L/0& :
%or Economic purposes, refers to the actual wor1 an individual or
individuals does
http://www.landandfreedom.org/econ/terms.htm#Factorshttp://www.landandfreedom.org/econ/terms.htm#Wealthhttp://www.landandfreedom.org/econ/terms.htm#Factorshttp://www.landandfreedom.org/econ/terms.htm#Wealth8/13/2019 Factors of Production01
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E'amples:
2n!31illed Labor
3emi!31illed labor
31illed Labor
4rofessional Labor* E'planation :
Land is the passive factor in production. s such, land simply
e'ists. )o ma1e the gifts of nature satisfy our needs and desires, human
beings must do something with the natural resources5 they must e'ert
themselves, and this human e'ertion in production is called labor.
Everything that people do, to convert natural opportunities into human
satisfactions !! whether it involves the e'ertion of brawn, or brains, or
both !! is labor, to the economist.
6!C4+)L :
%or Economic purposes, Capital refers to man!made resources used
to produce something else
E'amples:
(oney
7or1ers
%acilities
E'planation :
7hen the stuff of nature is wor1ed up by labor into tangible
goods, which satisfy human desires and have e'change value, we call
those goods 7ealth. 7hen labor satisfy desires directly, withoutproviding a material good, we call that "3ervices"5 thus, economists say
that labor provides the economy with "goods and services".- 7hen
some of the wealth is used to produce more wealth, economists refer to
it as Capital. hammer, a screwdriver, and a saw are used by a
carpenter to ma1e a table. )he table has e'change value. )he truc1
which delivers the table to a retail store, the hammer and other tools !!
and even the cash register !! are all forms of capital .
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* Capital 8oods 9 Consumer 8oods :
Capital increases labors ability to produce wealth and
services too-. )herefore, there is always a demand for capital goods, and
some labor will be devoted to supplying those goods, rather than
supplying the consumer goods that directly satisfy desires.
;ow do we figure out how much of societys labor to devote to
capital goods vs. consumer goodsthcenturyhas introduced four basic factors of
production i.e. land, labor, capital and entrepreneur bac1edby the
state!of!the!art technology to this modern world. fterward, for the
optimum use of scarce resources and to avoid their misuse around
the globe, international institutions were developed in the late
>
th
century which provides international standards and guidelinesfor the best utilization of these resources. Consequently, ?@aizenA
and?)otal Buality (anagementA came into the picture and form the
modern concept of zero defective production. )odays %ree )rade
greements, (%#and before than these strategies European 2nion
was also an effort to use global resources in a better way. 3o far in
stcentury, the international institutions have set some standards
for the optimum use of scarce resources.
%actors +nstitutions 3tandards
Land
gricultural-
! !Labor 2nions, ;&( etc (inimum wages,
social security,
pensions, payschemes,
Capital %inancial institutions,
7orld /an1. +(% etc
3toc1 e'changes,
%inancial
3ecurities,
+nternational
currencies D or
etc
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Entrepreneur 3EC4,C/& in 4a1istan Corporate laws,separate business
owner concept
* gricultural land of 4a1istan :
mazing, even in the stcentury, this planet dont have any
international standards for the use of agricultural land, though all 6
remaining factors of production based on it, have. @eeping 4a1istan,
my homeland, as an e'ample lets loo1 at the intensity of the problem.
griculture constitutes the largest sector of our economy. (aFority of
the population directly or indirectly is dependent on this sector. +t
contributes about G percent of 8ross $omestic 4roduct 8$4- and
accounts for half of employed labor force and is the largest source offoreign e'change earnings. +t feeds whole rural and urban population.
%ederal bureau of statistics, 4a1istan Huly >>I-
* 4roducts :
4a1istan is an agricultural country having agricultural products
cotton, wheat, rice, sugarcane, fruits, vegetables5 mil1, beef, mutton,
eggs- as its main e'ports, best e'porter of orange and at number Jthin
mil1 production in the world. I>9percnt5of countrys population hasagriculture sector as a main source of income directly or indirectly.
4a1istan is blessed with the best agricultural land and weather
conditions of the world in two of its provinces named as 4unFab and
3indh, both these are the most populous provinces of the country with
good literacy rate as compare to other two i.e. /aluchistan and 3arhad.
0ver last decade, the 80K) of 4a1istan shifting the load of
e'ports from agriculture sector . 9percnt5 of total e'ports and
nd
to service sector J.6 9percnt5- to industrial sector. 80K) hasannounced many industrial states in different cities, two of them are
in &aiwind and %aisal abad. ll this is good but the question is
?whether the placement of industrial states and housing colonies are
rightA in 4a1istan as a special case and in general to the whole world.
s everyone 1nows 4unFab and 3indh enFoy the best agricultural
land, these increasing industrial states and housing colonies are
capturing this golden agricultural land of these provinces of 4a1istan
rapidly.
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Labor, capital, entrepreneur and technology can be developed with
human efforts5 can it be done with our land< Can human being
produce new lands