Factors of Production

Production

The Factors of Production

Land Labor

Capital Entrepreneurship

Land

Land are the natural resources used to produce goods and services

The energy from the sun is considered land as it is used to produce something of value. In this case we are producing solar energy.

Labor

Labor includes people’s physical and mental talents

and efforts that are used to help produce goods and

services.

The Edge provides his labor services as a guitarist to the band U2. He is not playing just for fun. His labor is producing something of value – a product that is being sold.

A model walking down the runway counts as labor, as long as she is working to produce something of value. In this case she is representing the Alexander McQueen line.

Capital

Capital includes human made resources (buildings,

machinery, and equipment) used to produce goods

and services

The stage used in a U2 concert is considered capital

Entrepreneurship

Entrepreneurship the human resource that combines the other resources to

produce a product, makes nonroutine decisions, innovates, and bears risk

The Fashion Designer who created this design is an entrepreneur who takes the factors of production and produces something of value.

The band U2 are entrepreneurs. They took risks to produce a product, music, in the hopes that people would be willing to buy their music.

J.K. Rowling is worth more than 1 billion through her efforts as the author of “Harry Potter”. Her efforts to write, and film the Harry Potter series were entrepreneurial