These inputs are called working capital. The fourth requirement of production is human capital. Inputs like raw material and the money used for buying it, paying electricity bills and the wages of workers, etc. Physical capital includes inputs like machinery and tools, money and raw material required for production. Some inputs like the building of a factory and the tools and machinery installed in it can be repeatedly used for production year after year. The most important factor here is the entrepreneur, who is willing to risk his capital to start a production activity. These inputs are called physical capital or simply capital. The third requirement for production is the inputs required for the different stages of production.
These are the people who do the different tasks involved in production. The second requirement for production is labour or workforce. Land as a production factor also includes other natural resources like water, forests and minerals found in the earth’s crust. The first requirement for production is land. For example, for producing wheat, a farmer uses inputs like soil, tractor, tools, seeds, manure, water and his own services. Whatever is used in producing a commodity is called its inputs. land, labour, physical capital and human capital. Some of the important factors of production are: (i) Land (ii) Labour (iii) Capital (iv) Entrepreneur. There are four factors of production i.e. Goods and services we use are made available to us through production.
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