FOUR FACTORS OF BUSINESS 1
Four Factors of Business
The factors of business, also known as the factor of production, are the back bone of
the economy. They are used in the production of goods and services. Economists divide the
factors of production into four categories: Land, Labor, Capital, and Entrepreneurship.
Land is the first economic resource in the factor of production. The components of
land are all the natural resources, gifts of nature, like bodies of water, fisheries, trees, animals,
oil, and natural gas. Land is the raw materials in the production process and is usually a
limited resource for many economies. These natural resources can be divided into renewable
resources, like timber, or exhaustible resources, like oil or natural gas. The land is owned by
the household (all persons living under one same roof). The income that household receives
in return for the use of the land is called rent, which is establish by him. Using the land for
