Factors of Production Explained with Examples

If you want to produce any goods or services, you will need at least one of these four factors. And they are, land labor, capital, and entrepreneurship.

Patreon Link: https://www.patreon.com/user?u=36571443

It used to be only land, labor and capital, then later on, entrepreneurship was added. The fourth factor is also sometimes called as enterprise, or entrepreneurial ability.

Land can be the agricultural land where farmers grow the food we need to survive, land can be the land where oil and other resources can be found, land can be the place where a factory is built, land can be the commercial real estate land that will be the used to create value for the people.

But, natural resources are also a part of land. Yes. In the case of factors of production, natural resources are land.

Water is a natural resource, oil is a natural resource,

Natural resources have a big hand in determining what is produced in a specific area.

In a place where there is an abundance of oil as a natural resource, there will be different type of companies compared to a place where there is an abundance of water.

Labor can be either physical, or psychological.

Capital is not money. Capital is something you buy with money in order to produce whatever you want to produce. These are not natural resources. Capitals are man-made resources that is used to make something else.

Entrepreneurship in this case is the factor that combines the other three factors and comes up with the goods and services itself.

Capital goods and Consumer goods are also discussed in the video.


Recommended Books: [Affiliate Links]


The Intelligent Investor: https://amzn.to/2OhMH0N

Crossing the Chasm: https://amzn.to/3rw7xaR


My Gear Past,Present, and Future: [Affiliate Links: If you purchase the items below by clicking on the links shown here, I will get a small commission from it. Consider this another way of supporting the channel.]

First Recording Device (Headphones): https://amzn.to/3o0IjRj

Second Recording Device (Lavalier Microphone): https://amzn.to/31o4LtU

Current Recording Device: https://amzn.to/31m59Jh

Microphone Filter: https://amzn.to/37kTHRS


What I Plan To Use In The Future -

Drawing Tablet: https://amzn.to/3nVpGht

Backup Drive: https://amzn.to/3jdobYe

Timestamps:

Intro - 0:00
Land - 1:09
Labor - 2:20
Capital - 2:52
Entrepreneurship - 3:53
Example - 4:43
Capital vs Consumer Goods - 5:30
Land vs Capital - 6:55
Bonus - 8:10
Outro - 8:33