List and describe the five factors of
production.
Answer: The factors of production are labor, capital,
entrepreneurs, physical resources, and information resources. Labor refers to
the physical and mental capabilities of people as they contribute to the
economic system. Capital refers to the funds needed to create and operate a
business enterprise. Entrepreneurs are individuals who embrace the
opportunities and accept the risks of setting up and operating businesses.
Physical resources are tangible things organizations use in the conduct of
their business. Information resources include data and other information used
by businesses.
Source: Business Essentials, 8e (Ebert/Griffin)
– Global Edition
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