What are Factors of Production?
Factors of production are the inputs needed for creating a good or service, and the factors of production include land, labor, entrepreneurship, and capital.
| Factor of Production | Example |
| Labour | Workers working in a factory. |
| Capital | Investors provide money to run businesses and Banks provide loans as capital. |
| Land | Fixed Natural Resources |
| Entrepreneurship | Owners who run the business and take their share as profit. |
What are Factor Payments and Factor Services?
Factor Payments
The remuneration paid to factors of production is called Factor Payment.
Example:
| Factors of Production | Factor Payments |
| Labour | Wages |
| Land | Rent |
| Capital | Interest |
| Entrepreneurship | Profit |
Factor Services
They are services rendered by factors of production.
| Factor of Production | Factor Service |
| Land | Lease/Rent to industries and businesses. |
| Labour | Employment |
| Capital | Business operation |
| Entrepreneurship | Ideas and its execution to grow the business |