Factors of Production
As you know, producers are the people and businesses that make a commodity available for sale or trade. Production is the process of creating and providing a commodity to consumers. Factors of production are the forces that combine to make the production of goods and services possible. Click the tabs to learn about the factors of production.
Land as a factor of production means not just the surface of the earth, but everything in the universe that wasn't created by people. This includes all natural resources, such as air, water, plants, sunlight, rocks, and minerals. If something is tangible, it is made of physical matter and can be seen and touched. All tangible goods are created using materials that come from nature. This means all tangible goods are made from land. EXAMPLE Many houses are built using tangible materials that come from nature, such as wood and concrete. These houses are made from land. In this way, every tangible physical good is made from land, including everything from a toothbrush to a pair of shoes, a TV, a bike, and even the food you eat and the water you drink. Some of these tangible goods look a lot like they do in nature. EXAMPLE Fruits and vegetables may look similar in the store to how they look when they are growing outside. Many products don't look at all like the original natural resources they came from. EXAMPLE Toothbrushes, shoes, and computers are very different from anything found in nature. These products take more work to be turned from land into goods that can be sold. That effort is called labor. You'll learn about labor next.
Land as a factor of production means not just the surface of the earth, but everything in the universe that wasn't created by people. This includes all natural resources, such as air, water, plants, sunlight, rocks, and minerals. If something is tangible, it is made of physical matter and can be seen and touched. All tangible goods are created using materials that come from nature. This means all tangible goods are made from land. EXAMPLE Many houses are built using tangible materials that come from nature, such as wood and concrete. These houses are made from land. In this way, every tangible physical good is made from land, including everything from a toothbrush to a pair of shoes, a TV, a bike, and even the food you eat and the water you drink. Some of these tangible goods look a lot like they do in nature. EXAMPLE Fruits and vegetables may look similar in the store to how they look when they are growing outside. Many products don't look at all like the original natural resources they came from. EXAMPLE Toothbrushes, shoes, and computers are very different from anything found in nature. These products take more work to be turned from land into goods that can be sold. That effort is called labor. You'll learn about labor next.