1.2.3 Factors of Production

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    Economic resources are the factors of production which entrepreneurs bring together to make a profit. The factors of production are: capital, enterprise, land and labour which can be remembered as CELL. There are three types of capital: physical, fixed and working:

    • Physical refers to raw materials used in the production process.
    • Fixed refers to the machines and buildings in which the company operates.
    • Working refers to the finished or semi-finished consumer goods that can be sold.

     

    Entrepreneurship is one’s managerial ability. Land can refer to natural resources as well as the land that the business occupies. Labour is human capital which is the workforce of the economy including both managers and employees.

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