This is the resources or inputs used for producing goods and services for the satisfaction of consumers’ wants. The factors are:
is a free gift of nature.
Features. of land:
(a) Land is fixed; it is not easily increased nor decreased in Supply.
(b) Land s a gift of nature; it is not artificially created and therefore has no cost of production
(c) Land is subject to the law of diminishing returns.
(d) Land is geographically immobile.
Is all human resources both physical and mental efforts used in production process. Under labour, we have:
- Skilled labour- which comprises of Lawyers, Doctors, Engineers, teachers etc.
- Semi-skilled labour – which comprises people with little education such as typists, clerical workers etc.
- Unskilled labour – which comprises people with little or no education such as messengers, cleaners, security-men etc.
This is the Store of wealth used for the production of further wealth, It is regarded as the real money (Naira and kobo) or physical goods like tractors, machines, vehicles buildings and factories.
Characteristics of Capital
- Capital takes different forms e.g. money, Securities, seedlings, and plants,
- It may be ft a fixed form e.g; factory buildings, machines, raw materials and cash at hand.
Types of Capital
- Fixed Capital – are durable goods such as buildings and machines.
- Circulating capital – amount of capital needed for the day to day running of business. E.g. money used for the purchase of raw materials and payments of salaries.
- Social capital – are assets not connected directly with production but are essential for improving the efficiency of labour and people’s living standards e.g. nation’s stock of schools, houses, hospitals and other basic infrastructure.
Is the person who initiates, organizes, co-ordinates and takes all forms of risk involved in a business organization.
Functions of entrepreneur
- He bears risks alone.
- He initiates, organizes and co-ordinates the business in such a way that will profit him.
- He pilots the affairs of the organization in every aspect.
- He provides capital for the business and also decides on the line of business to embark on.
Reward for factors of production
Land – rent
Labour – wages
Capital – interest
Entrepreneur – Profits.