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 are required
(ii)
Labour for carrying out production activities. Some works may be done through
manual labour and other works 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 along 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.
(vi)
Human capital is the knowledge and expertise required to put together all the
above inputs to produce the out puts which can either be sold in the market or
used by the person producing the output. (5)
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