FACTORS OF PRODUCTION ALSO KNOWN AS “INPUTS”

LAND – ALL NATURAL RESOURCES OR “GIFTS OF NATURE” INCLUDES REAL ESTATE AND METALS / MINERALS FIXED (THERE IS ONLY SO MUCH) COUNTS ABOVE AND BELOW GROUND AS WELL

LABOR – PHYSICAL + MENTAL EXERTION OF PEOPLE ENGAGED IN PRODUCTION OF GOODS + SERVICES CONDITIONS… NOT SLAVERY OR COERCIVE – MUST BE ABLE TO DETERMINE PRICE OF SALE OF LABOR WHAT ABOUT…? PRISON LABOR ANIMAL LABOR

CAPITAL– ALL MANUFACTURED GOODS USED TO PRODUCE GOODS AND SERVICES. Ex.) MACHINERY, FACTORIES, STORAGE, TRANSPORT NOT MONEY – MONEY IS NOT A RESOURCE, AS IT DOESN’T PRODUCE ANYTHING - IT IS A MEANS OF EXCHANGE INVESTMENT CAN BE DEFINED AS THE PURCHASE OF CAPITAL GOODS HUMAN CAPITAL – INCLUDES SPECIALIZED SKILLS OR EDUCATION

ENTREPRENEURIAL ABILITY – PERSON WHO ASSUMES RISKS AND UNKNOWNS OF A BUSINESS COMBINES LAND, LABOR, CAPITAL TO CREATE A SUCCESSFUL BUSINESS VENTURE REMEMBERING THE FOUR FACTORS OF PRODUCTION IS A MUST. SO SAY IT WITH ME… LAND LABOR CAPITAL ENTREPRENEURSHIP

CIRCULAR FLOW MODEL