The Factors of Production
How businesses are made and run
I. Factors of Production
A) Definition- What people need in order to run
a business
1) What you need to make the product
2) What you need to sell the product
II. Labor
• A) Def- The People involved in the company
• 1) The People who make the Product
• 2) The People who sell the Product
III. Land
• A)Definition- The locations that the product is
made and sold
• 1) Where the Product is made
• 2) Where the Product is sold
IV. Capital
• A) Definition- Anything produced in an
economy that is used to produce other goods
and services
• 1) Any machines that help make the product
• 2) Any Machines that help sell the product
V. The Process of Production
• A. Definition- How the product is created until
it is sold
• 1) It’s how a business works
• 2) It’s like an egg becoming a chicken
VI. Wants
• A) Definition-What people either require or
desire so they are willing to pay money for it
• 1) Things people may want are quality,
quantity, consistency, affordability, easy access
• 2) If people do not want a product than
people will not buy it
VII. Production
• Definition- Where you actually make the
product and where your resources of land
labor and capital come together
• 1) Production is seen in the factories
• 2) It is also seen in the labor
VIII. Distribution
• Definition-How you get the product to the
actual stores to sell
• 1) Needs to leave from the factory
• 2) Need to get to the store
IX. Consumption
• Definition-Where the product actually goes
from the store to the consumer
• 1)This is called want satisfaction
• 2) This process is repeated every time you
need a product