The document discusses the key factors of production in an economy: labor, land, and capital. It defines each factor and explains how the forces of supply and demand determine the price or compensation for each one. Labor refers to human effort and is governed by the labor market. Land is a natural resource provided by nature. Capital consists of man-made resources like buildings and machinery that are used for production.

1. Konok Kumar Mondal
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2. Production is a process of combining
various material inputs and immaterial
inputs (plans) in order to make something
for consumption (the output).
*The production functions specifies the
maximum output that can be produced
with a given quantity of input.
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3. The most important forms of production are
market production
public production
household production
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4. Factors of production are the resources
the economy uses to produce goods &
services, including
labor
land
capital (buildings & machines used in
production)
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5. Labor is human capital.
Labor market, like other markets in the
economy, are governed by the forces of
supply and demand.
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6. THE MARKET FORCES OF SUPPLY AND DEMAND
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$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
0 5 10 15 20 25 30 35
The supply demand
for apples pickers
determine the price or
wage of apples
pickers
Demand
Supply
wage of apple pickers
Quantity of apples

7. Land is not created by mankind but it is a
gift of nature.
Original sources of all material wealth.
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8. 8
P
Q
Deman
d
Supply
Price of
land
quantity of
land
Supply and
demand
determine the
compensation
paid to the
owners of land.
P1
Q1

9. Capital is man made factor of production.
It involves time element.
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10. Financial capital
Social capital
Natural capital
Instructional capital
Human capital
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11. 11
Demand
P
Q
Supply
P1
Q1
price of
capital
quantity of
capital
The
compensation
paid to the
owners of
capital.

12. 12