D) natural resources. C) capital. The most successful are innovative risk-takers. This implies that the factors of production should be used in combination, so that the production … The production can be increased only by increasing the quantity of the variable factors or by having additional shifts or by increasing the hours of work. A) Factors of production are also known as resources. The factors of production include land, labor, entrepreneurship, and capital. D) Only those resources that are privately owned are counted as factors of production. These are often scarce resources. Factor of production that includes natural resources not created by humans: Capital: factor of production that includes tools, equipment, machinery, and factories used in the production of goods and services. Entrepreneurship as a Factor of Production Entrepreneurship is the drive to develop an idea into a business. Member since 20 June, 2011. Answer: D Type: Definition Page: 4 14. B) money. According to Eraser, “Factor of production as a group or class of original productive resources.” The production process of an organization can be efficient, if there is an optimal use of factors. B) private decisions do not result in an efficient allocation of scarce resources. Because of this shortage, economic goods have a positive price in the market. Factors of production are the inputs needed for the creation of a good or service. Prateek Agarwal’s passion for economics began during his undergrad career at USC, where he studied economics and business. Factors of Production An alternative term used by economists when talking about resources. ... Enterprise - This is the entrepreneur. The model assumes that the economy has factors of production that are fixed in both quantity and quality.   Thus, if the input is scarce in relation to the need for it, it is regarded as a factor of production. C Market failure occurs when: A) markets are competitive. who takes a risk and creates the business using the other three factors of production. Things like labor, entrepreneurship, land and capital are common examples of these. Economic goods are goods and services that require scarce resources or factors of production to produce them. Given the economy’s factors of production and technology, the economy can produce various combinations of the two goods. The factors of production attempt to instill the idea that resources are scarce. C) Factors of production include land, labor, capital, and entrepreneurship. Prateek Agarwal. A factor of production that has been produced for use in the production of other goods and services is: A) labor. When illustrated graphically, the production possibilities model typically limits our analysis to two goods. 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