Get Full Essay Get access to this section to get all help you need with your essay and educational issues. In factor markets the buyer and seller pattern is opposite to the goods markets; in goods markets firms sell and households buy, but in factor markets firms buy and households sell.
Apart from direct inputs such as materials and labor, factors of production include the skills, human resources, and equipment that are required to create a product. For small businesses, understanding these inputs is critical to the bottom line of the company as small incremental changes in cost structures can be the difference between profit and loss.
Production Capital Besides the supplies and materials that go into the manufacturing process, other "hard" assets are needed, such as equipment, buildings and trucks.
These assets are known as production capital. Production capital varies depending on the type of business. In a manufacturing setting, it includes the machinery used to build the products, the forklifts needed to warehouse and move them, and the building that houses the operation.
In a service business, it could include computers, desks and telephone equipment. Human Capital No business is completely automated; humans are involved in producing any business' product or service. Labor is often one of the largest expenses of a business and managing human capital appropriately and efficiently is one of the hallmarks of a successful business.
Human capital can also impact a business in a less direct, but just as important, way. Customers and clients see the employees in a business as a reflection of that company.
The way that the human resources of a company interact with the customer base has a large impact on customer longevity and loyalty. Resource Capital The building and equipment required to run a business need to be located somewhere. Resource capital encompasses the physical space a company occupies, as well as other non-man-made resources such as water and air.
Manufacturing operations often use more resource capital than service businesses because the manufacturing process requires more space for production, warehousing and showcasing.
Intellectual Capital A business is far more than the sum of its physical parts. It takes entrepreneurial spirit, experience, creativity and know-how to make a business successful. These components are collectively called intellectual capital.
Also included are rights, patents and trademarks; everything that you can't touch or see but is often the reason a business grows and succeeds.
Sometimes, these "assets" of a business are not captured on a traditional financial statement as their value is indeterminable. It is almost impossible for competitors to duplicate intellectual capital, making it one of the most coveted and useful assets a business can own. References 2 Factors of Production About the Author Angie Mohr is a syndicated finance columnist who has been writing professionally since Helping Kids Understand the Value of a Dollar.In economic terms factors of production can be defined as inputs that are used for the production of goods or services with the aim to make economic profit.
The factors, of production are the resources that include land, labor, capital, and enterprise. Need Homework Help in Factors Of Production? Livewebtutors USA expert offer Assignment help with A+ Grade guaranteed. Factors of production - the resources used by a company to produce goods and services.
Land - an essential factor of production in many economic activities. Labor - a factor of production used. 'Factors of production' may also refer specifically to the 'primary factors', which are stocks including land, labor (the ability to work), and capital goods applied to production.
Materials and energy are considered secondary factors in classical economics because they are . In factors of production there are commodities or services used to produce goods and services. And also explores how people and society try to use resources available, which have many different uses, in order to produce different goods and distribute among people.
'Factors of production' may also refer specifically to the 'primary factors', which are stocks including land, labor (the ability to work), and capital goods applied to production.
Materials and energy are considered secondary factors in classical economics because they are .