8 Outcome: Factors of Production
What you’ll learn to do: list the four factors of production required to sustain a business
Consider baking a cake for a friend’s birthday. Pretty straightforward, right? You combine your labor with the ingredients from the store to produce a cake. Well, this is what we see in business when they uses resources to produce things but in business we call these factors of production. Land and natural resources provide the needed raw materials or even the location from which the business operates. Labor transforms raw materials into goods and services. Capital (equipment, buildings, vehicles, cash, and so forth) are needed for the production process. Entrepreneurship provides the skill and creativity needed to bring the other resources together to capitalize on an idea. In this section we will take a deeper look at not only these factors of production but how they actually cycle from your home to business and back.
LEARNING ACTIVITIES
The learning activities for this section include the following:
- Reading: Factors of Production: Inputs and Outputs
- Reading: The Flow of Inputs and Outputs
- Self Check: Factors of Production
Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.