The factors of production are the four resources which are used throughout an economy in order to produce goods and services.
The four factors of production are:
Land – the actual land and natural resources which are used in the production process.
Labour – the people who are working in various jobs throughout the economy.
Capital – man-made resources such as components, machinery, factories, offices etc.
Enterprise – the entrepreneurs who come up with the ideas for a business and then utilise land, labour, and capital in order to turn their business ideas into reality.
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Fixed capital – this is the capital which is not destroyed or consumed in the production process. It remains within the production process and can be used repeatedly for a long period of time. (e.g. machinery, factories, vehicles etc)
Entrepreneur – an individual who is willing to take a risk by organising the other factors of production in order to set up a business.