真四集張八第日九初月十年午戊愿表
1979
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經濟及公共事務(五)
Economics and Public
Affairs (5)
Factors of production
Four factors of production
Factors of production
are the resources used as
inputs for producing goods and
services. Th
grouped into
they are
· LABOUR,
CAPITAL and ENTREPRENEURSHIP.
1 Land:
Land in economics.
taken to mean not
that. part of the surface on which
simply
Lon
cau be carried out, but also all the free gift of nature' such as minerals, sea, soil fertility etc. Land provides both space and natural resourceEB.
limited in supply.
Labour::
Labour includes form of labour, manual, human physical effort, skill.or. unskill, with the
exception of organization and management. As such,
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WAH KIU YAT PO
are of course, a large number of types of lahour input, varying in effort and akill content Because it is a human
facter in production, the provision of labour
depends upon population
labour mobilty and the
social and psychological. aspects of workers
3. Capítal.
Capital is defined as the stock of goods which are uped in production and which have themselves been produced, Capital may consist machinery, tools, factory buildings and all kinds - of industrial plant, raw materials, partlyfinished products, and means of transport. For business, purpose, capital generally has to be considered in. terms of money. In monetary terms capital can be regarded as the anney value of real assets.
Entrepreneulahips
Entrepreneurs is used to denote the organizing factors.jn/production. The functions of
entrepreneur are to:
supply the capital of the firm;
combine the other.
factors of production;
decide on rate of
日九月一十年八七九一腊公年七十六国民童中,有教援鉴
郭日僑華
四期星
Wages:
output in the light of expection about demand
and
bear the risk involved in production activities.
Some people do not recognise the entrepreneur as a separate factor of production and so regurd the entrepreneur as a apcial kind of labour. However, the organizing under-taken the entreprenur is not only con a wider scale than
that of labour, but also different in kind.. Consequently, the bearing of uncertainty and risk. is regarded us the primary function of entrepreneur.
Returns, to factota of Production
1. Rent:
In economics, rent refers to ble payment for the use of factors of production which is in imperfectly elastic supply. Since land is a factor of production which is fixed in aupply the payment for the use of land is rent.
Wages are the
payment to labour for kta.anaistance t好
production, Wages can be.
be regarded as a price and, therefore, likes other prices, ere determined in a market for labour. The demand for labour is derived from the demand. for the goods and services for the production.. It. means that anything thật simulates the demand for goods and services will stimulate the demand for labour and so wages.
Interest:
Interest is the payment for the use of capital and the rate of return on the capital inveated. As funds for the capital invested may
borrowed from lenders interest can also be vegarded as the payment by a borrower for the use of a sum of money for a period of time
In early times horrowers were poor
people who had generally.
suffered some misfortune. Nowadays borrowing is mostly undertaken by
businessmen, who have to be regarded as
creditworthy if there
to obtain loans, and, and
who hope to employ the. money in such a way as to yield them more profit:
than the interest they/ have to pay on the 1.0am
Profit:
Profit is regarded : as the income which accrues to the entrepreneur, ie:: the residual left after. Payment to all the inputa he: employs lieve heeu made profit is the payment tô the entrepreneur for undertaking the risks of production)
Normal profit is defined as that profit which is just sufficient to induce the entrepreneur to remain in his present activity. If actual profit, are less than bormal. profit, the entreprenur will switch to more profitable activity the other hand, if profit exceed normal. profit, we would.
entrepreneurs in other
activities to more into
-the one in question.
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