What are resources and factors of production?

Concept about resources and factors of production

Modern production can be considered as the use and application of certain resources in the right way. This, of course, is somewhat vague formulation, but it still gives some idea of ​​the importance that resources and factors of production have. They are divided into two groups. The first of these includes classical production resources. With the development of both the economic life of mankind as a whole and of economic science in particular, the notion of other, no less important than classical, economic resources used in production has been defined.

Short Description

resources and factors of production Consider what classic resources and factors of production are. There are three of them: land, capital and labor. We need to consider them in more detail. When we talk about land, we can keep in mind a few things. This may be the land on which production facilities or offices are located. It can be resources extracted as minerals. In the broad sense of the word - this

is what we get directly from nature, that is, any natural resources. Capital is not just money. First of all, this is a large amount of money, which will allow to organize production or expand it. But not only that. This type of equipment is also referred to here, which is commonly referred to as fixed assets( machines, equipment, trade counters, if the enterprise conducts trade, and so on).Work corresponds to two main points: it is about the amount of labor and about the time, in which the labor activity takes place. In fact, the level of qualification of the workforce is still important, but we will consider this together with the resources that we attributed to the second group. These are the classic resources and factors of production. Why are we talking about them in the first place? At the dawn of the industrial age, industry( in contrast to our time) worked for a certain period simply to increase productivity: the more you produce, the more you grow rich. It did not last long, but it took place. Then the competition did its job and the life of the producers became more difficult. Consider the remaining resources and factors of production.

Factors of modern production

production resources The first and main of them is an entrepreneurial ability, or the ability to manage a business. This resource connects and organizes all other resources, targeting them to make a profit. Another factor is the level of technology used. Another factor of production is a highly skilled workforce. Also allocate and information resource. About him speak in two senses. On the one hand, the very use of information technology, the availability of appropriate infrastructure and personnel is important for this. On the other hand, information itself is a very valuable resource( especially if it is timely, complete and reliable).As it is easy to see, resources and factors of production from the second group can be supplemented, as the economy and business continue to develop and become more complex.

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