Describe Factors of Production.

    Economics classify economic resources into four general categories. These are:

1. Land
2. Labor
3. Capital
4. Entrepreneurship

1. Land: Land is the term for the natural resources on earth that are used to produce a good or service.For example, if a farmer rents or buy a field, he is using as an input to produce crops. Land includes all natural resource such as arable land, forests, mineral and oil deposit and water resource.

2. Labor: The resource labor consists of the physical and mental talents of individuals used in producing goods and services. If the farmer employs people to work on his land,he is using labor as an input to produce crops.

3. Capital: Capital includes all manufactured aids used in producing consumer goods and services. For example, money, equipment, buildings, tools machinery etc.

4. Entrepreneurship: Entrepreneurship is when an individual takes an idea or innovation and tries to combine all the factors of production in order to make profit. Entrepreneurship refers to management, organization and planning of the other three factors.