Factors Of Production

An economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. The factors of production include land, labor, capital and entrepreneurship.

In essence, land, labor, capital and entrepreneurship encompass all of the inputs needed to produce a good or service. Land represents all natural resources, such as timber and gold, used in the production of a good. Labor is all of the work that laborers and workers perform at all levels of an organization, except for the entrepreneur. The entrepreneur is the individual who takes an idea and attempts to make an economic profit from it by combining all other factors of production. The entrepreneur also takes on all of the risks and rewards of the business. The capital is all of the tools and machinery used to produce a good or service.


Investment dictionary. . 2012.

Look at other dictionaries:

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  • factors of production — The resources required to produce economic goods. They are land (including all natural resources), labour (including all human work and skill), capital (including all money, assets, machinery, raw materials, etc.), and entrepreneurial ability… …   Accounting dictionary

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  • factors of production — means used in the manufacturing of merchandise and the providing of services (land, labor, capital, management, etc.) …   English contemporary dictionary

  • factors of production — /ˌfæktəz əv prə dʌkʃən/ plural noun the three things needed to produce a product (land, labour and capital) …   Dictionary of banking and finance

  • production, theory of — ▪ economics Introduction       in economics, an effort to explain the principles by which a business firm decides how much of each commodity that it sells (its “outputs” or “products”) it will produce, and how much of each kind of labour, raw… …   Universalium

  • Production theory basics — In microeconomics, Production is simply the conversion of inputs into outputs. It is an economic process that uses resources to create a commodity that is suitable for exchange. This can include manufacturing, storing, shipping, and packaging.… …   Wikipedia

  • Production–possibility frontier — In economics, a production–possibility frontier (PPF), sometimes called a production–possibility curve or product transformation curve, is a graph that compares the production rates of two commodities that use the same fixed total of the factors… …   Wikipedia

  • production system — ▪ industrial engineering Introduction       any of the methods used in industry to create goods and services from various resources. Underlying principles       All production systems, when viewed at the most abstract level, might be said to be… …   Universalium

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