WEEK/TERM: THIRD TERM/WEEK 3
DATE: 6th June 6, 2020.
CLASS: GRADE 3.
SUBJECT: PRE-VOCATIONAL STUDIES.
TOPIC: Factors of Production.
REFERENCE:
BRIEF EXPLANATION:
Production is the process of growing or making food, goods or materials, especially in large quantities.
Notes
Meaning of production
Factors of production are the resources people use to produce goods and services; they are the building blocks of the economy.
Factors of production are divided into 4 categories as listed below:
- Land
- Labour
- Capital
- Entrepreneurship
Land:
Land is a broad category as a factor of production in that it refers to all natural resources. These resources are gifts that are given by nature. Some typical examples of natural resources are water, oil, copper, natural gas, coal and forests.
Labour:
Labour as a factor of production involves only human input. It is any work done by people contributing to production. The quality of labour depends on the workforce, skills, education and motivation.
Capital:
Capital here does not refer to money (Money is not a factor of production), as you might expect, but manufacturing resources such as factories and machines. These are man made goods used in the production of other goods.
Entrepreneurship:
Entrepreneur is someone who takes on the economic risk involved in bringing the other three factors of production together.
Payments of factors of production
| Factors of production | Payments | |
| 1. | Land | Rent |
| 2. | Labour | Wages |
| 3. | Capital | Interest |
| 4. | Entrepreneur | Loss/gain |
Exercises/Assignment
- What is factor of production?
- Factors of production are divided into how many groups? List and explain them.