What are the Factors of Production

Fill the following table based on the information on the crops grown in your region. This episode of our Economic Lowdown Podcast Series explains the four factors of production with examples. Listen to the audio or read more in the transcript below. While not directly listed as a factor, technology plays a vital role in influencing production.

To make the maximum use of the existing land, farmers use ____ and ____.Both these have led to increase in production of crops. This clearly shows the inequality in the distribution of cultivated land. Modern farming methods require a great deal of _____.Small farmers usually need to borrow money to arrange for the capital, and are put to great distress to repay the loan. Therefore, capital too is a scarce factor of production, particularly for the small farmers. The first factor of production is land, but this includes any natural resource used to produce goods and services.

• Capital is essentially the money used at the time of starting a business.
• It is the most common way of increasing production on a given piece of land.
• (d) They remain out of work for most parts of the year and have to take loans from the moneylender to fulfill their needs.
• Production workers are paid for their time and effort in wages that depend on their skill and training.

The distribution of farmers in India and the amount of land they cultivate is given in the following Graph 1.1. Green Revolution was not equally successful for both the crops. While the production of wheat increased significantly, the production of pulses has remained more or less the same. The following table shows the production of wheat and pulses in India after the Green Revolution in units of million tonnes. Was the Green Revolution equally successful for both the crops? What are the non-farm production activities taking place in your region?

Are All Factors of Production Equally Important?

(iii) Apart from working on his own field he has to work on the field of the rich farmers or work as a casual labourer to survive. (i) A farmer having 1 hectare of land for farming is called a subsistence farmer because 1 hectare of land is too less for even the sustenance of a small family. (a) Farmers of Punjab, Haryana and Western Uttar Pradesh were the first to try modern farming methods in India. Modern farming methods also help to increase the yield per hectare. (i) Multiple Cropping When more than one crop is grown on a piece of land during the year it is known as multiple cropping. With good irrigation it will be possible to do multiple cropping, helping to increase the yield per hectare.

He raised venture capital money to rent office space, hire more employees, and purchase additional server space for development. However, as business continued to grow, Meta built its own office space and data centers. Each of these requires significant real estate and capital investments.

An entrepreneur is a person who combines the other factors of production – land, labor, and capital – to earn a profit. The most successful entrepreneurs are innovators who find new ways to produce goods and services or who develop new goods and services to bring to market. Without the entrepreneur combining land, labor, and capital in new ways, many of the innovations we see around us would not exist. Think of the entrepreneurship of Henry Ford or Bill Gates.

The Role of Land

The cultivation of crops on land by farmers increases its value and utility. For a group of early French economists called “the physiocrats,” who predated the classical political economists, land was responsible for generating economic value. Natural resources, such as oil and gold, can be extracted and refined for human consumption from the land. Working capital can also be explained through the example of class 9. Money and raw material in hand are generally known as working capital. Machines, buildings, tools, etc are essentially fixed capital, and utilization of these can be done in production over some time over several years.

This includes not just land, but anything that comes from the land. Some common land or natural resources are water, oil, copper, natural gas, coal, and forests. Land resources are the raw materials in the production process. These resources can be renewable, such as forests, or nonrenewable such as oil or natural gas. The income that resource owners earn in return for land resources is called rent.

AnswerMultiple Cropping To grow more than one crop on a piece of land during the year is known as multiple cropping. It is the most common way of increasing production on a given piece of land. As such, factors of production, such as land and capital, are owned partially or fully by the government under socialism and communism. The definition of factors of production in economic systems presumes that ownership lies with households, who lend or lease them to entrepreneurs and organizations.

The Factors of production Class 9

• (v) He has no working capital so he is also not able to buy modern machinery, HYV seeds or insecticides and pesticides.
• (a) As very few educated people were there in the village, there was not any demand for computer courses.
• An example of entrepreneurship is the evolution of the social media behemoth Meta (META), formerly Facebook.

Answer Kishora’s fixed capital is the buffalo and wooden-cart which he has purchased with the bank loan. Kareem has opened a computer class centre in the village. In recent years, a large number of students have been attending college in Shahpur town. Kareem found that a number students from the village are also attending computer classes in the town.

Entrepreneurship As a Factor

Each has grown wheat on his field though the production is different (see column 2). The consumption of wheat by each family is the same (column 3). The whole of surplus wheat this year is used as capital for next years production. Also suppose, production is twice the capital used in production. Though both land and capital are scarce, there is a basic difference between the two factors of production.

Because of irregular work and low wages they are unable to fulfill their needs and are in debt. Answer Distribution of land among the 450 families of Palampur. (iii) Tubewell equipment and water pumps used for irrigation are also manufactured in industries. A) It is well connected with neighbouring villages and towns.

In contrast to labour,_________ is a scarce factor of production. Moreover, even the existing land is distributed ______(equally/unequally) among the people engaged in farming. There are a large number of small farmers who cultivate small plots of land and the most abundant factor of production is live in conditions not much better than the landless farm labourer.

The modern definition of factors of production is primarily derived from a neoclassical view of economics. Initially, only labor was considered by most economists, but eventually, land and capital were considered as well. Entrepreneurship is a slightly more recent addition to the list as it was formerly lumped in with capital. (ii) Electricity powers all the tube wells in the fields that help to irrigate much larger areas of land more effectively as compared to the traditional Persian wheel drawn by bullocks. Since the entire cultivated area of 200 hectares had come under irrigation farmers did not have to depend on ‘rainfall and could grow multiple crops.

Those who control the factors of production often enjoy the greatest wealth in a society. In capitalism, the factors of production are most often controlled by business owners and investors. In socialist systems, the government exerts greater control over the factors of production. Modern farming methods require both working as well as fixed capital. Thus, the farmers require more cash than before to start with farming.

Entrepreneurs are a vital engine of economic growth helping to build some of the largest firms in the world as well as some of the small businesses in your neighborhood. Entrepreneurs thrive in economies where they have the freedom to start businesses and buy resources freely. Multiple cropping is the method of growing more than one crop on the same piece of land during different seasons of the year. On the other hand, modern farming methods include the use of tubewells for irrigation, HYV seeds, chemical fertilisers and pesticides in farming.

Land includes any natural resource used to produce goods and services; anything that comes from the land. Depending on the context, some factors of production might be more important than others. For example, a software company that relies primarily on the labor of skilled software engineers might see labor as its most valuable factor of production. Meanwhile, a company that makes its money from building and renting out office space might see land and capital as its most valuable factors. As the demands of a business change over time, the relative importance of the factors of production will also change accordingly.