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Goods and services are produced by using productive resources that economists call factors
of production.Labor includes the physical and mental efforts of all the people who work on
farms and construction sites and in factories, shops, and offices.Land and raw materials: Inputs into production that are provided by nature: e.g.
unimproved land and mineral deposits in the ground.Factors of production are grouped into four categories: Land, Labor, Capital,
Entrepreneurship.Labor earns wages.Land earns rent.????
Goods and services are produced by using productive resources that economists call factors
of production.
Factors of production are grouped into four categories: Land, Labor, Capital,
Entrepreneurship.
Land and raw materials: Inputs into production that are provided by nature: e.g.
unimproved land and mineral deposits in the ground.
Labor: The work time and work effort that people devote to producing goods and services is
called labor. Labor includes the physical and mental efforts of all the people who work on
farms and construction sites and in factories, shops, and offices.
Capital: The tools, instruments, machines, buildings, and other constructions that
businesses use to produce goods and services are called capital.
Entrepreneurship: The human resource that organizes labor, land, and capital is called
entrepreneurship. Entrepreneurs come up with new ideas about what and how to produce,
make business decisions, and bear the risks that arise from these decisions.
Land earns rent.
Labor earns wages.
Capital earns interest.
Entrepreneurship earns profit
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