(a) What is production?
(b) Explain the following factors of production: (i) land (ii) labour (iii) capital
(c) State three functions of an entrepreneur.
Explanation
(a) Production is the creation of utility. OR It is the creation of goods and services which satisfy human wants.
(b) Explanation of factors of production:
Land;
(i) Land is a free gift of nature.
(ii) Land is limited in supply. Land includes water, air, minerals, etc.
(iv) The reward for land is rent.
(v) Land is immobile.
Labour:
(i) Labour is the mental or physical human effort used in the performance of some tasks with a view to some reward.
(ii) The reward for labour is wages, commission or salaries.
(iii) Labour is mobile.
(iv) It can be improved upon by training.
Capital:
(i) It is wealth directed towards production of goods and services.
(ii) Capital include motor vans, premises, machinery, cash, stocks, etc
(iii) Interest is the reward for capital.
(iv) Capital is man made factor of production.
(v) Capital is mobile.
(c) Functions of an Entrepreneur
(i) He bears the risk of the enterprise.
(ii) He provides the capital needed to start the business.
(iii) He takes decisions on what to produce and how to produce them.
(iv) He determines the prices of the products and services.
(v) He organises and coordinates other factors of production so as to produce goods and services.
(vi) He introduces innovations and new ways of doing business.