In this note, we are going to learn about the Concept of Production and Different Factors of Production. Welcome to Poly Notes Hub, a one solution for Polytechnic Notes or Engineering Notes.
Author Name: Arun Paul.
Concept of Production
In economics, production refers to the process of converting inputs, such as resources and labour, into outputs, which can be goods or services that meet human wants and needs. Production is the process of utilising numerous production aspects to create items and services that are valued to consumers. This process is critical for economic growth and development since it provides revenue, creates jobs, and raises living standards.
Different Inputs or Factors of Production
The production inputs can be categorized into four groups –
1. Land
This term refers to all natural resources used in the industrial process. It encompasses not only the actual land, but also all resources derived from it, such as minerals, water, forests, and agricultural goods.
2. Labor
Labor refers to the physical and mental work put out by humans in the production process. It encompasses both the work done by individuals and the skills, knowledge, and expertise they offer to the production process. The labor can be Skilled or Unskilled labor.
3. Capital
Capital refers to the man-made resources employed in the manufacturing process to produce commodities and services. This encompasses both physical and financial capital.
4. Organizer or Organization
The Organizer is the individual inside an institution who organizes production, coordinates other components, and carries commercial risk. For example, partnerships and joint stock companies.