The term ‘factors of production’ refers to the resources that are combined in the production process to create goods and services.
Land – natural resource
Labour – human resource
Capital – man made resource
Entrepreneur – human resource
Land includes all natural resources such as soil, seas, rivers, forests, minerals, vegetation etc.
Labour is categorized as skilled, semi-skilled, unskilled or professional workers
Capital includes assets such machinery, equipment and vehicle owned by the company. Capital also includes raw materials, finished and semi-finished, goods, bank and cash balances.
The entrepreneur is the owner and risk taker in a business venture. He is responsible for combining all the factors of production.