Factor Inputs and Factor Rewards
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Factors of production are essential inputs, including land, labor, enterprise, and capital, used to supply goods and services. They are organized by entrepreneurs who take risks in the production process. Additionally, factor rewards represent the income generated from each factor when utilized, such as rental income, wages, profits, interest, and dividends.
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Factor Inputs and Factor Rewards
- 2. Factors of Production (Factor Inputs) Factors of production are the inputs available to supply goods and services in an economy. Land Labour Enterprise Capital Natural resources available for production The human input into the production process Goods used in the supply of other products e.g. tech Entrepreneurs organise factors of production and take risks
- 3. Factor Inputs and Factor Rewards Factor rewards describe the incomes that flow to each of the main factors of production when there are brought into productive use. Land Labour Enterprise Capital Rental income to owners of land Wages and salaries from employment Profits Interest from savings + dividends from shares