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Factors of production and their rewards
An essay about four factors of production pdf
A point inside the production possibilities FRONTIER
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In this essay I will be talking about the 4 factors of production and the production possibility frontier and why some economies operate within the production possibility frontier and factors that cause the Production Possibility Frontier to shift outwards making the economy more efficient. The four factors of production are land, labour, capital and enterprise. Land is the natural resources available for production. Some nations are lucky enough to have the resources within their country and don’t have to import resources, for example oil or copper. Land: Nothing is free, except the air we breathe. The rest are scarce, because there are not enough natural resources in the world to satisfy the demands of consumers and producers. That is the economic problem, people’s wants are never-ending but the resources are insufficient to fulfil their demands. Air is classified as a free good since consumption by one person does not reduce the air available for others - a free good does not have an opportunity cost. Labour: The human input into the production process. “In the UK, of about 59 million inhabitants only approximately 35 million are of working age (16-64 years for men and 16-59 for women), and of those about 28 million have paid jobs.”- (Tutor2u, N.D) Owners of businesses prefer their workers to be motivated, meaning that they have the desire to work effectively and in reward wither benefit from extra pay or fringe benefits. The more produced by the labour force, the higher the Gross Domestic Product. Capital: “Capital has several meanings - including the finance raised to operate a business. But normally the term capital means investment in goods that can produce other goods in the future.” – (Tutor2u, N.D) Capital refers t... ... middle of paper ... ...ficient. In conclusion, as a country works towards shifting the production possibility frontier outwards, the economy benefits by the fact that more jobs are being created as more products are being supplied. With the improvement of technology countries can exploit their resources more efficiently which causes more production, with more production come more sales and with more sales or exports there might eventually be an increase in economic growth. However, with more production come more external costs like pollution. Identifying and estimating a monetary value for air pollution can be very difficult to do but is important for economists concerned with the impact of economic activity on our environment. Besides the externalities, shifting the production possibility frontier outwards will create more jobs in the economy and that is a very good thing indeed.
Equity capital represents money put up and owned by shareholders. This money can be used to fund projects and other opportunities under the auspice of creating greater value. This type of capital is typically the most expensive. In order to attract investors, the firms expected returns must consummate with the associated risk ("Financial leverage and,"). To illustrate this, consider a speculative oil drilling operation, this type of operation would require higher promised returns than say a Wal-Mart in order to attract investors. The two primary forms of equity capital are 1) money invested into the business for an ownership stake (i.e. stock) and 2) retained earnings from past profits used to fund future growth through acquisitions, expansions and product development.
... Capital, Corporation Finance and the Theory of Investment", The American Economic Review, vol. 48, no. 3, pp. 261-297.
According to the Organic Consumers Association, in 1970 there were approximately 900,000 family farms in the United States; by 1997 there were only 139,000 family farms. This number is continually decreasing by the year. Why is this a problem? Factory farms promote abusive practices in order to maximize production at minimal cost at the expense of the environment, the community, and even our personal health. They house thousands of animals and inject them with hormones in order to maximize their growth and food output. The techniques being used are inhumane and are used thousands of times a day. According to the Organic Consumers Association, two out of every three animal products in stores come from factory farms. Factory farms dominate food production throughout the country. Animals most commonly consumed that require large-scale farming practices are cows, chickens and pigs. The methods of farming are not only bad for the animals themselves, but it’s affecting the meat we put into our bodies, and is therefore affecting one’s health. Factory farms ultimately have a negative effect on the health of both the animal and the consumer of the animal product.
As mentioned above many products from different industries were discovered and invented which made life easier and cheaper. The factories did not spend fast amount of money on making the products as they were allowed to pay their workers as much as that suited them so it did not cost them much and the innovation of factory machines also helped them produce in big quantities. These products were very demanding which meant that it grew the economy of the making nation, “Britain’s output of coal soared from 5.23 million tons in 1750 to 68.4 million tons a century later” (Strayer, 2012; 835). The industrial revolution did not just grow the economy of industrializing countries it also helped grow the economy of non-industrializing nations. For example, Latin America was one of the non-industrialized nations however its economy grew unexpectedly as they exported demanding raw materials such as rubber, silver, coal and many more resources that were essential for the growth of the industrial revolution (Strayer, 2012; 854). Latin America’s economy depended on the export of these materials and because of their popularity and essentiality it grew the state’s
..., (21 and over). The Employment Rights Act of 1996 has included benefits UK’s citizens with four weeks paid yearly leave, sick pay, maternity and father leave. All employees are legally entitled to 5.6 weeks paid holiday time per year. All employers are responsible of their employee’s health and safety care. Adults are limited to 48 hours per week of work. Direct/indirect discrimination or harassment is not tolerated as well as favoritism. Age, disability, sexual orientation, race, religion, etc. are all factors. The UK is in progress for a plan of terminations.
Theoretical by Engle’s brings to our attention that societies being divided into classes or estates, are determined by what is produced and how it is produced, and how the product is exchanged within those societies. The mode of production is changing, and we need to understand these changes. We can further enlighten ourselves on this society by seeing how commodities are being produced and also how the material needs of a society are being met. We are currently under the capitalist mode of production and it is irrational and unjust.
· Capital: When labor is applied to land to grow wheat, for instance, something else is used. Generally it is a plow or a tractor. That is to say, land and labor are shared with manufactured resources in order to produce the things that we need. These manufactured resources are called capital, which consists of machines, buildings, and tools. Additionally, capital consists of enhancement to natural resources, such as irrigation ditches. Money is used to buy factors of production – it is not a factor itself. The return for investing in capital is called interest.
Every year there is a ‘league table‘ published showing the level of economic growth achieved by each country. The comparison is made using each countries Gross Domestic Product, or GDP. An important factor to look at is the difference between actual and potential economic growth. Actual economic growth increases in real GDP. This increase can occur as result of using previously unemployed resources, or reallocating resources into more productive areas or improving existing resources. Whereas potential economic growth is the productive capacity of the economy. For example, it can be shown by the predicted ability of the country to produce goods and services. This changes when there is an increase in the quantity or quality of the resources. All countries have different ways of achieving this with the resources they have available to them. For this reason it party answers the question of why some countries are richer than others. It is widely thought that the productive capacity of an economy will increase each year largely due to improvements in education and technology. This will obviously differ from country to country. For example, in the UK the quality of fertilizer could be improved, hence forth increase the years fruit and vegetable output.
Industrial revolution in India has been eternal. Born around the time when British Industrial revolution was in its teens, it has continued to expand perpetually. Expanding, yet so slow that it seems chimerical, like a mirage.
A production Function in general, without specifying what kind, is related to the output of a production process which starts which starts with the factors of production. The production functions are an integral part for explaining marginal products as well as allocative efficiency. There are different classifications for production functions, and what constitutes them, determined by the type of production. This article of the WIKI aims to focus on the Substitional production function, explaining what it is and means, as well as the limitational, doing the same. (1)
The first is economic growth benefits all members of the society. An example of this can be seen through the industrial revolution that took place in America in 19th century. Through the industrial revolution thousands of jobs were created and products could be manufactured at a record time. It also increases the standard of living for the average American by raising wages. Lastly it gave women the opportunity to work outside of matriarch fields such as nursing and teaching. The United States technological transitions through the industrial revolution benefited all members of society through job creation and technological advancement that made it a leading power concerning modern
Analysis of the labor market in the economy reveals a reduction in vacancies while the number of job seekers significantly increases over the past few decades (Dickerson, 2008, p.1). Particularly, the youth employment looks worrying with a serious downward trend with so many of them unemployed. The numbers of free people who are full educated or trained have also decreased. The unemployed in the economy are either inactive or unemployed. The annual changes continue to show a rise in unemployment of young people both for student and others. With lack of government employment as well as training programs, many individuals opt to seek for self-employment (Dickerson, 2008, p.1). Statistic continues to show that there has been an increase of workless people in comparison to the vacancies available. The general picture, therefore, remains that labor market constantly fails to meet the needs of people regarding employment. Although this is the case, there has been some variation across regions with Scotland and Wales in the UK showing decreased performance. There remains a risk that employment will increase in the coming years. The present concern is long-term unemployment, specifically with regards to the youths who are most disadvantaged in the labor market (Dickerson, 2008, p.1).
A movement of industrialization transformed nations everywhere. Many countries experienced social and economic prosperity in this period known as the Industrial Revolution. The people of these countries also experienced change (Jacob, par. 1-5). Prior to the revolution, life for many was much different, allowing for many changes to occur; innovations reached several countries involved in this movement, and the lives of the citizens were largely impacted both positively and negatively.
Air pollution has become very costly environmental problem in terms of both human lives and in terms of billions of dollars lost for health-care expenditure and crop damage.
Economic growth is one of the most important fields in economics. In current generation economic is developing well. Economic growth is really important to country and for the world as well. Economic are one of the identity for country because it shows a country development and attraction for other countries (F, Peter. 2014). For example well economic develop such as Singapore, Dubai, New York, and Japan. These countries are well develop and maintaining their economic growths. Economic growths are really important because higher average incomes enables consumers to enjoy more goods and services. Then, lower unemployment with higher output and positive economic growth firms tend to utilize more workers creating more employment. Enhanced public