To produce a good or provide a service, resources must be used which is known as to produce a good or provide a service, resources must be used which is known as entrepreneurs to make goods and provide services.
Entrepreneurship is called fourth factor of production. So, there are four factors of production i.e, land, labor, capital and entrepreneurship.
Land: Land stands for natural resources or gifts of nature such as oil, iron ore, forests and water. There is sometimes confusion here. When natural resources such as wheat are turned into flour, the flour is a good not natural resource. It is used to bake bread, then it is intermediate good and bread is final good.
Labor: Labor refers to human resources. It reflects the abilities of people and includes people health, strength, education, motivation and skills. The–labor force is the number of people in an economy willing and able to work.
Capital: It refers to man made things used in production- money , building , tools , machinery , road etc.
Entrepreneurship: It is special kind of labor that represents the characteristics of people who assume the risk of organizing productive resources to produce goods and provide services. It refers to the management , organization and planning of the other three factor. It is the ability to oversee entire production process and ability to take risks.
