Question

Which factors are considered when deciding how to make goods & services?

Answer 1

There are four factors of production of goods and services:

1. Land. These are all minerals, raw materials and other natural resources, which can be used in production of goods and services.
2. Labour. The term "Labour" should be understood as conscious human activity, aimed to satisfy of the needs of individual and public consumers.
3. Capital. It is aggregate of property, used for profit in the strict sense. In a broad sense, it is equipment, inventory, funds, transport and estate, which suply process of production of goods and services.
4. Entrepreneurship. This fourth factor links together all three previous factors. In a broad sense, entrepreneurship is an ability to organize and to manage production and distribution of goods and services and to provide effective economy activity.