Land refers to all of the natural resources that businesses need to make and distribute goods and services. Among the resources that the paper company requires, the trees and water used to make paper would be classified as land, as would the ground on which the factory, warehouse, and office buildings are located. In economics, terms as various as gold, soil, forests, oil, coal, air, lakes, rivers, wildlife, fish, the sun, and even outer space fall under the heading of land. All of these things are alike in that they are provided by nature rather than made by humans.Labor refers to the workers necessitated to produce goods and services. The factory workers, office workers, marketing staff, and sales staff of the paper company would all be considered labor. Labor includes not just the number of employees but also the various abilities called for from workers. The labor needs of a paper company would probably differ substantially from the labor needs of a computer company, even if both needed the same number of employees.Capital refers to the human-made equipment required to produce goods and services. The paper company’s factory, machinery, office building, and delivery trucks would be examples of capital. Sometimes capital is also defined to include the money used to buy such equipment and to start and maintain business operations.Some economists include a fourth category among the factors of production: entrepreneurship. Others consider entrepreneurship a form of labor or capital. An entrepreneur is someone with the creative ability required to organize the other factors of production in ways that produce profits. The profitability of the paper company depends not simply on the presence and quality of its land, labor, and capital but also on the decisions made about how to employ these resources.
Land refers to all of the natural resources that businesses need to make and distribute goods and services. Among the resources that the paper company requires, the trees and water used to make paper would be classified as land, as would the ground on which the factory, warehouse, and office buildings are located. In economics, terms as various as gold, soil, forests, oil, coal, air, lakes, rivers, wildlife, fish, the sun, and even outer space fall under the heading of land. All of these things are alike in that they are provided by nature rather than made by humans.<br><br><br>Labor refers to the workers necessitated to produce goods and services. The factory workers, office workers, marketing staff, and sales staff of the paper company would all be considered labor. Labor includes not just the number of employees but also the various abilities called for from workers. The labor needs of a paper company would probably differ substantially from the labor needs of a computer company, even if both needed the same number of employees.<br><br>Capital refers to the human-made equipment required to produce goods and services. The paper company’s factory, machinery, office building, and delivery trucks would be examples of capital. Sometimes capital is also defined to include the money used to buy such equipment and to start and maintain business operations.<br><br>Some economists include a fourth category among the factors of production: entrepreneurship. Others consider entrepreneurship a form of labor or capital. An entrepreneur is someone with the creative ability required to organize the other factors of production in ways that produce profits. The profitability of the paper company depends not simply on the presence and quality of its land, labor, and capital but also on the decisions made about how to employ these resources.
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