My Economics Guide will explain in detail the factors of production in this paper. In our previous article, we examined the concept of economy. If you have not read this article click here to read .
WHAT ARE THE PRODUCTION FACTORS?
The more technical version of the expression of our own resources in daily life are factors of production. In general, production factors consist of four basic concepts.
- Soil (Natural Resources)
- Labor (Labor)
- Capital
- entrepreneurship
Now let’s take a closer look at these production factors, which are very important for the economy …Soil , does not represent the only dirt tracks. It includes trees, animals, mineral deposits, mines, sea creatures and groundwater. Soil is divided into renewable and non-renewable resources. For example, while fruit trees are renewable natural resources, coal beds in that region are non-renewable natural resources. As it can be understood from here, renewable energy sources are easily reproducible, while non-renewable energy sources are difficult to regenerate. Soil is the most important production factorfor an economy to stand on its own.
Labor represents people with talents. Labor is grouped as professional workforce, skilled workforce and unskilled workforce. People in the professional workforce make money through their knowledge. Doctors, engineers, teachers are in this group. Skilled workforce earns money for what they know and can do. Electrical craftsmen, carpenters, plumbers are in this group. Unskilled workers often earn money by working in production and monotonous jobs. For example, a doner who works in a doner is included in this group.
Capital represents all the tools used to produce, not money, as we know in daily life. At this point, the capital and investment relationship comes into play. All the objects we need to have to produce are obtained as a result of the investment. In other words, investment is the money used to receive these objects.Entrepreneurship is the production factor that provides theother production factors mentioned above andenables production or service. This factor involves risks. These risks include material losses, such as loss of investment money. However, this factor is a must in production or service.