ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Factors of production are resources that are the building blocks of the economy; they are what people use to produce goods and services. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship.

Detailed explanation-2: -The factors of production are the inputs used to produce a good or service in order to produce income. Economists define four factors of production: land, labor, capital and entrepreneurship.

Detailed explanation-3: -It means to bring the factors i.e. land, labour and capital together to undertake a business or production process. Organization implies not only running the business but also shouldering the loss, if any. The man who undertakes all this work is called as organizer or Entrepreneur.

Detailed explanation-4: -In a simplified model of an economy, known as a circular flow diagram, households own the factors of production. They sell or lend these factors to firms, which produce goods and services that households buy. Under this theoretical model, firms do not own the factors of production.

Detailed explanation-5: -Entrepreneur uses his/her skills and knowledge to bring together all the other factors of production in order to produce goods and services in the economy.