Answer:
The aim
of production is to produce the goods and services we want.
This requires four inputs which are called 'factors of production'. These
are
(i)Land and other natural resources like water,
mineral, forest, etc
(ii) Labour for carrying out production activities.
Some works may be done through manual labour and other
work may require highly skilled or educated person.
(iii) Physical capital like machinery, building, tools,
etc is called fixed capital which can be used repeatedly for a long time while
raw material and money in hand is called working capital. Working capital is used
up during the production activity, resulting in finished goods and services
required, whereas fixed capital is used again and again.
(iv) Human capital is the knowledge and expertise required
to put together all the above inputs to produce the output, which can either
be sold in the market or used by the person producing the output.
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