ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Labor as a factor of production refers to the effort that individuals exert when they produce a good or service. For example, an artist producing a painting or an author writing a book. Labor itself includes all types of labor performed for an economic reward, such as mental and physical exertion.

Detailed explanation-2: -The second factor of production is labor. Labor is the effort that people contribute to the production of goods and services.

Detailed explanation-3: -Ultimately, then, an economy’s factors of production create utility; they serve the interests of people. The factors of production in an economy are its labor, capital, and natural resources. Labor is the human effort that can be applied to the production of goods and services.

Detailed explanation-4: -Economists traditionally divide the factors of production into four categories: land, labor, capital, and entrepreneurship. Land refers to natural resources, labor refers to work effort, and capital is anything made that is used to make something else.