There are four factors of production naming, Land, Labor, Capital Entrepreneur. I have included here the first two factors (Land & Labor) and the remaining two (Capital & Entrepreneur) will be posted later this week.

Land (rent)

•It refers to all natural resources, which are given by and found in nature, and are, therefore, not man made to be use in production.

• It does not mean only the soils or the ground surface but it refers to all the things and powers that are given free to mankind by nature. In this sense, land includes all the materials and things which are available beneath the soil or above. It includes forest, mountains, rivers oceans, minerals, air, and sunshine; light etc. the owner of land (land-owner) gets rent as a reward for the productive services of the land.

• Thus, people who own land and offer it to others for their use, earn an income called rent.

• This is can also classified as fixed resources.

Labor (Salary/Wages)

• It is any form of human effort exerted in the production of goods and services.

• Labor covers a wide range of skills, abilities, & characteristics.

• It includes the accountant, economist, nurse, typists, and other numerous people who leave their homes in the morning to be in time for their 8-hour work.

• The supply of labor in a country is dependent on its population and on the percentage of this population that us willing to join the labor force. Naturally, a country with high population growth is expected to come up with a bigger labor supply.

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