What are the four factors of production?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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There are generally said to be four factors of production (or types of resources).  Some texts will argue that there are only three.

The three that are universally agreed upon are land, labor, and capital. Land is what we might call natural resources.  These are things that are not made by humans.  Labor is the work that humans put in to making goods and services.  Capital is the things that are made by humans and then used to make other things.  In other words, these are things like tools and machinery.

The fourth factor of production is entrepreneurship.  Entrepreneurship is the taking of risk by those who try to create new kinds of businesses.  

All of these factors of production are used in making goods and services.

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