Factors of Production - Research Article from Encyclopedia of Business and Finance

This encyclopedia article consists of approximately 6 pages of information about Factors of Production.
This section contains 1,603 words
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Land, labor, capital, and entrepreneurship: These are four generally recognized factors of production. Of course, in a literal sense anything contributing to the productive process is a factor of production. However, economists seek to classify all inputs into a few broad categories, so standard usage refers to the categories themselves as factors. Before the twentieth century, only three factors making up the "classical triad" were recognized: land, labor, and capital. Entrepreneurship is a fairly recent addition.

The factor concept is used to construct models illustrating general features of the economic process without getting caught up in inessential details. These include models purporting to explain growth, value, choice of production method, income distribution, and social classes. A major conceptual application is in the theory of production functions. One intuitive basis for the classification of the factors of production is the manner of payment for their...

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This section contains 1,603 words
(approx. 6 pages at 300 words per page)
Buy the Factors of Production Encyclopedia Article
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Macmillan
Factors of Production from Macmillan. Copyright © 2001-2006 by Macmillan Reference USA, an imprint of the Gale Group. All rights reserved.
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