Talk Show America

Thursday, March 3, 2011

What effects do capital, land, and labor have on the production of goods and services?



Land, labor, and capital are referred to as "factors of production. They are all factors to each other and gods lets start with Land.
Land is pretty much anything that isn't man made. For instance land could be anything from grass to air, as are all manner of natural forces or opportunities that are not created by people. Land effects Labor so much because Labor uses capital on land to produce wealth. See theres that capital do you now see there all connected?Well thats pretty much all there is for Land lets goto Labor.
    Labor is goods made from raw materials that come from Land. Since were human we have material 
needs that have to be made by Land and Labor. These goods that are made by Labor from Land are called Wealth. When labor satisfy desires directly, without providing a material good, we call that "Services"; thus, economists say that labor provides the economy with "goods and services".
    When some of the wealth is used to produce more wealth, economists refer to it as Capital. Capital increases labor's ability to produce goods and services for people. Such as when you get a hammer. The hammer is then used to make a table which is shipped in a truck all of these are examples of Capital. 

    

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