THE FACTORS

OF PRODUCTI

ONDANISILE MADUNA

danisilemaduna@gmail.com

What do you understand by term Production?

What are the various factors

that can be used for agriculture?What are the various factors

that can be used for setting up a new factory?

The purpose of the topic is to introduce some basic concepts relating to production

Factors of production

Land

Labour Capit

al

CONCEPT OF PRODUCTION

Production is defined as the process of converting the input

(raw material) into output. Production may be an activity

that generate income.

LAND

Land is that factor of production which is available to us as a free gift of nature. It not include not only the soil but also other free gift of nature ( like forest, water, natural resources etc.)

CHARACTERISTICS OF LAND

• Free gift of nature.

• Limited in supply.

• Differ in variety.

• Immobile.

• Passive factor of production.

• Alternative uses.

• Indestructible.

LABOUR

Labour is the human factor of production and include all the

physical and mental activities which are required in the process of factor

of production.

CHARACTERISTICS OF LABOUR

• Human factor.

• Active factor.

• Cannot be separated from labourer.

• Perishable.

• Labourers sell his labour not himself.

• Difference in efficiency.

• Mobile.

• Weak bargaining power.

• More wages less work.

Capital is the stock of produced means of production.

CAPITAL

•Man made factor.

•Mobile and transferable.

•Depreciates.

•Passive factor of production.

CHARACTERISTICS OF CAPITAL

TWO ASPECTS OF CAPITAL

HUMAN CAPITAL

PHYSICAL CAPITAL

HUMAN CAPITAL

Knowledge

Life experience

Skills and ability

Creativity

ELEMENTS OF PHYSICAL CAPITAL

FIXED CAPITAL

WORKING CAPITAL

http://www.google.co.in/url?sa=i&rct=j&q=fixed+capital&source=images&cd=&cad=rja&docid=VQHTsBv4Kiu2YM&tbnid=l66U7LFH1Odn4M:&ved=0CAUQjRw&url=http://kalyan-city.blogspot.com/2012/06/what-is-fixed-capital-definition.html&ei=-bGIUejSMtHyrQfshoGoDw&bvm=bv.45960087,d.bmk&psig=AFQjCNEWlsLy3sDoBf0qjoLjvAdCTuwJKw&ust=1367999342667568

Physical capital

Entrepreneur

The term 'Entrepreneur' has been derived from a French word 'Entreprendre' meaning to undertake certain activities.

Normally, Entrepreneur has to perform two types of functions which are explained here with the help of pictures given in next slide-:

1) Organization Function-:

Factors of Production viz. land, labour and capital are scattered at different places. All these have to be assembled together. This is done by enterprise through entrepreneur. This is 'Organization Function'. Org. function is the work of bringing the required factors together and making them work harmoniously.

2) Risk Bearing Function-:

Entrepreneur has to bear risks and uncertainties. For facing uncertainties he may get profit or may incur loss. This is the 'Risk Bearing Function' and entrepreneur is the risk bearer.

Qualities / Skills of an Entrepreneur

Ability to organize.

Professional approach

Risk bearer

Decision Making

Negotiation skills

References:

• The presentation was a mashup of slideshare information by the following:

• The factors of production by- Leenavaish1506@gmail.com.

• The factors of production by- Shubham Singhal Chandrashlekar Bhardwaj.

• The 4 factors of production by- Veer Singh IX

• The factors of production by- Abhishek Agrawal & Koushal Changoiwala

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