FACTORS OF PRODUCTION

Four Factors of Production

We use four basic resources to produce goods and
services, known as factors of production.
4 Factors of production (C-E-L-L)
Land: All natural resources used in the production, not
created by human effort. These are Allah’s gift to mankind. Ex:
water, gas, fruits, fish etc.
 Reward for land is rent.
Labour: All kinds of human effort used in the production.
• Reward for labour is wages and salaries.
Capital: Man-made resources used in the production.
These are tools, equipments, machineries and factories used in
the production.
• Capital depreciates and loses value over time.
• Reward for capital is interest.
Entrepreneur: The person who undertakes the
responsibility and risks of employing other factors of production
to earn a profit. They start new business or bring new products
to market.
• Reward for entrepreneur is profit.