In economics, factors of production are resources used in the production of goods and services, including land, labor, and capital. ‹ The template below is being considered for deletion. ... Good. ... Land in economics comprises all naturally occurring resources whose supply is inherently fixed (i. ... Capital has a number of related meanings in economics, finance and accounting. ...

Land, labor, and capital

Resource in economics distinguish among such factors of production as: Many of the gifts of nature cannot be used in their original form. ...

• Land or natural resource – naturally-occurring goods such as soil and minerals that are used in the creation of products. The payment for land is rent.
• Labour – human effort used in production which also includes technical and marketing expertise. The payment for labour (workforce) is a wage or a salary. Wage can be either in nominal value or in real value. Usually the salary or wage are marked as "w".
• Capital goods – human-made goods (or means of production) which are used in the production of other goods. These include machinery, tools and buildings. In a general sense, the payment for capital may take the form of interest or dividends.

Land in economics comprises all naturally occurring resources whose supply is inherently fixed (i. ... This article does not cite any references or sources. ... In classical economics and all micro-economics labour is a measure of the work done by human beings and is one of three factors of production, the others being land and capital. ... A wage is a compensation which workers receive in exchange for their labor. ... This article or section does not cite any references or sources. ... A wage is a compensation which workers receive in exchange for their labor. ... A nominal is a word or a group of words that functions as a noun, i. ... Look up real in Wiktionary, the free dictionary. ... Capital has a number of related meanings in economics, finance and accounting. ... Means of production (abbreviated MoP; German: Produktionsmittel), also called means of labour are the materials, tools and other instruments used by workers to make products. ... It has been suggested that Interest expense be merged into this article or section. ...

Classical economics

The distinctions above were first developed in classical economics, including the work of Adam Smith (1776), David Ricardo (1817), and the later contributions of Karl Marx and John Stuart Mill as part of one of the first coherent theories of production and distribution in political economy. Marx in Das Kapital refers to the three factors of production as the "holy trinity" of political economy. Working capital was generally viewed as being a stock of physical items such as tools, buildings and machinery. This view was explicitly rejected by Marx. Classical economics developed the labor theory of value as part of the theory of distribution. Classical economics is widely regarded as the first modern school of economic thought. ... For other persons named Adam Smith, see Adam Smith (disambiguation). ... David Ricardo (18th April, 1772–11th September, 1823), a political economist, is often credited with systematizing economics, and was one of the most influential of the classical economists, along with Thomas Malthus and Adam Smith. ... Karl Heinrich Marx (May 5, 1818 – March 14, 1883) was a 19th century philosopher, political economist, and revolutionary. ... John Stuart Mill (20 May 1806 – 8 May 1873), British philosopher, political economist civil servant, and Member of Parliament, was an influential liberal thinker of the 19th century. ... The Politics series Politics Portal This box:      Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... Das Kapital (Capital, in the English translation) is an extensive treatise on political economy written by Karl Marx in German. ... The labor theory of value (LTV) is a theory in classical economics concerning the value of an exchangeable good or service. ...

Neoclassical economics

Neoclassical economics continued the distinction of land, labor, and capital. It developed an alternative theory of value and distribution. For a modern discussion about problems in defining and theorizing about the neoclassical theory of capital, see capital controversy. Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... The capital controversy refers to a debate in economics concerning the nature and role of capital goods (or means of production) that occurred during the 1960s, largely between economists such as Joan Robinson and Piero Sraffa at the University of Cambridge in England and economists such as Paul Samuelson and...

A fourth factor?

Alfred Marshall introduced organization as a fourth factor of production; J.B. Clark gave the co-ordinating function to entrepreneurs; Frank Knight introduced managers who co-ordinate with their own money and the financial capital of others. Others consider this to be a form of labor or "human capital." Alfred Marshall Alfred Marshall (July 26, 1842–July 13, 1924), born in Bermondsey, London, England, became one of the most influential economists of his time. ... John B. Clark redirects here. ... For the sequel to the computer game Entrepreneur, which has no article of its own, see The Corporate Machine. ... Frank Hyneman Knight (November 7, 1885 - April 15, 1972) was an important economist in the first half of the twentieth century. ...

In a market economy, considered as a separate factor, entrepreneurs combine the other factors of production, land, labor, and capital in an innovative way to make a profit. In a planned economy, central planners decide how land, labor, and capital should be used to provide for maximum benefit for all citizens.

Further distinctions from classical and neoclassical microeconomics include the following: Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ...

• Capital has many meanings, including the financial capital raised to operate a business. Normally, capital means investment in goods that can produce other goods in the future. It can also refer to machines, roads, factories, schools, and office buildings in which humans produced in order to produce other goods and services. Investment is important if the economy is to achieve economic growth in the future.
• Fixed Capital this includes machinery, work plants, equipment, new technology, factories, buildings, and goods that are designed to increase the productive potential of the economy for future years.
• Working Capital this includes the stocks of finished and semi-finished goods that will be economically consumed in the near future or will be made into a finished consumer good in the near future. It includes also the liquid assets needed for immediate expenses linked to the production process (salaries, invoices, taxes, interests...).

In brief, financial capital is money used by entreprenuers and businesses to buy what they need to make their products (or provide their services). ... Invest redirects here. ...

Free trade and movement of factors of production

Free trade laissez faire theory argues that economic efficiency is achieved in cases where free movement (laissez passer) of the "factors of production" is permitted. Karl Polanyi in "The Great Transformation", however, argued that historically whenever laissez faire policies are adopted, legal moves to prevent the free movement of one of the factors of production always occur (for example current neo-liberal attempts to free the movement of capital and resources are today increasingly tied to immigration controls). Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ... Laissez-faire (IPA: ) is a French phrase meaning let it be (literally,Let do). From the French diction first used by the 18th century physiocrats as an injunction against government interference with trade, it became used as a synonym for strict free market economics during the early and mid-19th... There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ... Laissez-faire (IPA: ) is a French phrase meaning let it be (literally,Let do). From the French diction first used by the 18th century physiocrats as an injunction against government interference with trade, it became used as a synonym for strict free market economics during the early and mid-19th... Karl Paul Polanyi (October 21, 1886 - Pickering, Ontario April 23, 1964) was a Hungarian intellectual known for his opposition to traditional economic thought and his influential book The Great Transformation. ... The Great Transformation is a phrase used to describe the sum total of a collection of changes, possibly connected in their origin, that occurred in Europe from about 1700 to about 1900. ... The term neoliberalism is used to describe a political-economic philosophy that had major implications for government policies beginning in the 1970s – and increasingly prominent since 1980 – that de-emphasizes or rejects positive government intervention in the economy, focusing instead on achieving progress and even social justice by... Not to be confused with capitol. ... Look up Resource in Wiktionary, the free dictionary. ... Although human migration has existed for hundreds of thousands of years, immigration in the modern sense refers to movement of people from one nation-state to another, where they are not citizens. ...

Human capital and intellectual capital

Contemporary analysis distinguishes capital goods from other forms of capital such as human capital. Human capital is acquired through education and training, whether formal or on-the-job. A more recent coinage is intellectual capital, used especially as to information technology. Capital has a number of related meanings in economics, finance and accounting. ... Human capital is a way of defining and categorizing the skills and abilities as used in employment and as they otherwise contribute to the economy. ... Intellectual capital makes an organization worth more than its balance sheet value. ... Information and communication technology spending in 2005 Information technology (IT), as defined by the Information Technology Association of America (ITAA), is the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware. ...

Prior to the Information Age the land, labour, and capital were used to create substantial wealth due to their scarcity. During the Information Age (circa 1971-1991), the Knowledge Age (circa 1991 to 2002), and the Intangible Economy (2002-present) the primary factors of production have become less concrete. These factors of production are knowledge, collaboration, process-engagement, and time quality. According to economic theory, a "factor of production" is used to create value and economic performance. As the four modern-day factors are all essentially abstract, the current economic age has been called the Intangible Economy. Intangible factors of production are subject to network effects and the contrary economic laws such as the law of increasing returns. It is therefore important to differentiate between conventional (tangible) economics and intangible economics when discussing issues related to factors of production which change according to the economic era that society is experiencing. For example, land was a key factor of production in the Agricultural Age. A university computer lab containing many desktop PCs The transition of communication technology: Oral Culture, Manuscript Culture, Print Culture, and Information Age Information Age is a name given to a period after the industrial age and before the Knowledge Economy. ... A university computer lab containing many desktop PCs The transition of communication technology: Oral Culture, Manuscript Culture, Print Culture, and Information Age Information Age is a name given to a period after the industrial age and before the Knowledge Economy. ... A knowledge economy is either economy of knowledge focused on the economy of the producing and management of knowledge, or a knowledge-based economy. ... Technocapitalism is a term used by some to describe the changes in capitalism brought about by the emergence of the high technology sector of the economy. ... The network effect causes a good or service to have a value to a potential customer dependent on the number of customers already owning that good or using that service. ...

See also

• Cost of production theory of value
• Factor world
• Labor theory of value
• Microeconomics
• Optimum factor allocation
• Production, costs, and pricing
• Production theory basics
• Productivity world
• Resource-Based View

In economics, the cost-of-production theory of value is the belief that the value of an object is decided by the resources that went into making it. ... Factor World is a term used by William Easterly to describe the traditional model of aggregate production function which is: Y = K^α . (AL)^(1-α) It is a model of Factors of production movement based on free movement of those factors which in theory would reduce inequality between nations. ... The labor theory of value (LTV) is a theory in classical economics concerning the value of an exchangeable good or service. ... Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... This article or section does not cite any references or sources. ... In microeconomics, Production is simply the conversion of inputs into outputs. ... Productivity World is a term used by William Easterly to describe that relative productivity among Factors of production is the same in the sectors across countries, but rich countries have absolute productivity advantage. ... The Resource-Based View (RBV) is an economic tool used to determine the resources available to a firm, which ought to be exploited in order for that firm to develop a strategy for achieving sustainable competitive advantage. ...

References