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Factors of Production
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Montāžas Teksta
I've always wondered how goods get produced in these factories?
Why don't we ask for a tour?
What exactly goes into producing these products?
All production starts from land, labour, capital and entrepreneurship
Land is all of the natural resources found on earth.
Would the examples be minerals, oil, woods and animals
Would that mean capital is the resources made for production?
Exactly! and labour is time and effort that humans put into making all goods and services
Capital is also divided into three categories: fixed, physical and working
So working capital is the money used to buy the goods and services?
Yes! physical capital is the physical resources available to a business
So human capita is the experience that result in knowledge or skills to produce goods and services
Entrepreneurship is the innovation, skill, vision and creativity required to start a business
Thank you for the tour! Now we both have a better understanding of how economy works!
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