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FACTORS OF PRODUCTION - Coggle Diagram
FACTORS OF PRODUCTION
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CAPITAL: This is the finance, machinery and equipment needed for the manufacture of goods.
LAND: This term is used to cover all of the natural resources provided by nature and includes fields and forests, oil, gas metals and other mineral resources.
ENTREPRENEUR: Tis is the skill and risk of taking ability of the person who brings the other resources as factors of production together to produce a good or services for example, the owner of a business. There people are called entrepreneur.
FOPs OF A SCHOOL
CAPITAL : TABLE, CHAIRS, BLACKBOARD.
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ENTREPRENEUR : PRINCIPAL, TRUSTIES
FOPs OF A RESTURANT
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CAPITAL : TABLE, CHAIRS, DECORATION
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FOPs OF A BANK
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CAPITALL : MACHINERY, DESK, CHAIRS, CARDS
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ENTREPRENEUR : BOSS, OWNER OF THE BANK
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*Why each is necessary for production to take place?
If businesses can improve the efficiency of the factors of production, it stands to reason that they can increase production and create higher quality goods at lower prices. Any increase in production leads to economic growth as measured by GDP. They are necessary because as there is never enough land, labor, capital, enterprise to produce all of the needs and unlimited wants of a whole population, there is an economic problem of scarcity.