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"for every farm activity there is a need of the factors of production". how do you agree or disagree with this statement.

A. The aim of production is to produce the goods and services that we want. There are four requirements for production of goods and services.

 

 

a. Land and other natural resources such as water, forest, minerals, etc.

 

 

b. Labour i.e. people who carry out the work for production.

 

 

1. Skilled labour: Highly educated workers to perfARm the necessary tasks.

 

 

2. Semiskilled labour or unskilled labour: They can do manual work.

 

 

c. Physical capital: The variety of inputs required at every stage during production.

 

 

1. Fixed capital: They can be used in production over many years.

 

 

2. EX: Tools, machines and buildings.

 

 

3. Working capital: The raw material and money in hand are called working capital. They are used up in the process of production and alter from day-to-day.

 

 

d. Human capital: Human knowledge and enterprise is needed to put together land, labour, and physical capital and produce an output. This is called human capital.


The above mentioned functions of the various factors of production make them necessary for carrying out the farm activities too.

 

 

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Real economic growth only comes from increasing quality and quantity of the factors of production, which consist of four broad types: land, labor, capital and entrepreneurship. Saving and discovery are the two basic ways to improve or increase the factors of production. Saving occurs when present consumption is delayed, and those resources are instead used to enable capital investment. Discovery can include technique or process discovery, technological discovery or resource discovery.

Defining a Factor of Production

The St. Louis Fed defined the factors of production as "what people use to produce goods and services." Improvement along these factors enables producers to create more and cheaper economic goods. This, in turn, allows consumers to earn more for their labour services and to pay less for existing goods.

Land and labour are the earliest factors of production; humans have always mixed their labour with land and natural resources. Income from land and labour are called rent and wages, respectively.

 

The third factor, capital, includes all those resources or tools that humans use to improve their productivity. Common forms of economic capital include machinery, tools and buildings. Income from capital resources is normally called interest.

Entrepreneurship is a little more controversial. Most classical economic models largely ignore entrepreneurs. Some economists don't consider it a separate good, but rather the purposeful combination of the other three factors. Payment to entrepreneurship is called profit.

Creating Economic Growth

The purpose of economic organisation – including all labour – is to create things that people value. Economic growth occurs when more and cheaper goods can be created. This raises the standard of living by lowering costs and raising wages.

As Parmenides, a Greek philosopher, famously quipped, "Nothing comes from nothing." Growth can't be legislated or wished into existence; it needs to be produced.

Economic growth results from better factors of production. This process is clearly demonstrated when an economy undergoes industrialization or other technological revolutions; each hour of labour can generate increasing amounts of valuable goods.Hence,i agree with this statement.


 
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