We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Factors of Production Essay Sample

The whole doc is available only for registered users OPEN DOC

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

Factors of Production Essay Sample

1. Land
2. Labor
3. Capital (Money) is not actually considered as capital in economics as it does not produce a good and service but it is rather a form of asset that is used as a medium of exchange. 4. Entrepreneurship

The 3 E’s in ECONOMICS
1. Efficiency refers to productivity and proper allocation of economic resources. 2. Equity means justice and fairness.
3. Effectiveness means attainment of goals and objectives.

Types of Economic Systems

To address economic problems, several economics systems have been created and applied throughout history.

Traditional Economy -is basically subsistence (survival)economy.

Command Economy- a type of economy wherein the manner of production is dictated by the government.

Market Economy
– or capitalism’s basic characteristic is that the resources are privately owned, and that the people themselves make the decisions.

Socialism is an economic system wherein key enterprises are owned by the state.

Socialism is considered as an economy bordering between capitalism and communism.

Mixed Economy
-is a mixture of market system and the command system.
What is to be produced?
Refers to the kinds and quantities of goods and services to be produced refers to the level or degree the available resources to be utilized in the production process.

How is it to be produced?
Refers to the combination of various resources and the techniques to use in production.

Who is to receive it?
Refers to how to divide up what has been produced among consumers in the society.

How should a system be adapted to change?
Refers to how the economic system can make significant reallocations of resources in order to preserve efficiency in their use. .


The quantity of a good or service that people are ready to buy at a given prices within a given time period. SUPPLY
the quantity of good and services that firms are ready and willing to sell at a given price within a period of time, other factors being held constant.

Law of Demand
states that if price go UP, the quantity demanded will go DOWN. Conversely, if price goes DOWN, the quantity demanded will go UP . The REASON for this is because consumers always tend to MAXIMIZE SATISFACTION.

The following are the more general
reasons for the change in demand.

1. Taste or preferences pertain to the personal likes and dislikes of
consumers for certain goods and services.

2. Changing Incomes
-Increasing incomes of households raise the demand for certain goods or service and vice versa.

3. Occasional or seasonal products. Events or seasons in a given year also result to a movement of the demand curve with reference to particular goods.

4. Population change
– an increasing g population leads to an increase in demand in some types of goods and services, and vice versa.

5. Substitute goods
-substitute goods are goods that are interchanged with another goods.

6. Expectations of future prices
-if buyers expect the price of good and service to rise (or fall) in the future, it may cause the current demand to increase (or decrease). Also, expectation about the future may alter the demand for a specific commodity.

Law of Supply
-states that if the price of a good or service goes UP, the quantity supplied for such good or service will also go UP; if the price goes DOWN the quantity supplied also go DOWN.

Reasons that cause the supply to change.

1. An optimization in the utilization of resources will increase supply, while a failure to achieve such will result to a decrease in supply. Optimization means efficient use of resources.

2. Technological change- the advantages and disadvantages of technology.

3. Future expectations-this factor impacts sellers as much as buyers. If sellers anticipate a rise in prices, they may choose to hold back the current supply. If sellers however expect a decline in the price for their products, they will increase present supply.

4. Numbers of sellers
-The numbers of sellers has a direct impact on quantity supplied.

5. Weather conditions-bad weather, typhoon, drought and other natural disasters reduces the supply of agricultural commodities, while good weather has an opposite impact.

6. Government policy
-removing the quotas and tariffs on imported products also affects the supply. Lower trade restrictions and lower quota or tariffs boost imports, thereby adding more supply of goods in the market.

Market Equilibrium
the meeting of supply and demand wherein supply equals demand at a particular price and quantity.

We can write a custom essay

According to Your Specific Requirements

Order an essay

You May Also Find These Documents Helpful

Ten Principles of Economics

The administration of society\'s assets is vital in light of the fact that assets are rare. Scarcity alludes to the constrained idea of society\'s assets. Economics includes the investigation of how society deals with its rare assets In many social orders, assets are allotted through the consolidated choices and activities of a huge number of family units and firms. Hence, financial analysts must examination: 1)...

The key elements of the financial plan

One of the fundamental tools used in managing account, profit forecasting and pricing strategies is definitely the “break-even analysis”, that can be defined as “a technique for analysing how revenue, expenses and profit vary with changes in sales volume or simply it is the analysis that enables any professional organisation to determine the break-even point”. The “break-even point” or BEP can be considered as “the...

Managing fixed and variable costs in a...

Explain the fixed and variable costs in relation to the organization In management accounting, cost management has a crucial role and finds its foundations in understanding “cost behavior”. “Cost behavior analysis” can be defined as “the study of how cost changes when there is a change in an organization’s level of activity”. Managers need to analyze the behavior of three different types of costs: -...

Types of Costs in Management Accounting

In management accounting, cost management has a crucial role and finds its foundations in understanding “cost behavior”. “Cost behavior analysis” can be defined as “the study of how cost changes when there is a change in an organization’s level of activity”. Managers need to analyze the behavior of three different types of costs: - Fixed costs; - Variable costs; - Semi-Variable (or mixed) costs. A...

Cost Sheet: Meaning, Advantages and Preparation

Like for any other business, it is very important for hotels tracking how much money is being spent when taking a new project and running their daily operations, considering the revenue made and the profit generated during a specific period. The most valuable tool to keep track of the expenditures is the “basic cost statement”, also known as “basic cost sheet”, that can be defined...

Get Access To The Full Essay
Materials Daily
100,000+ Subjects
2000+ Topics
Free Plagiarism
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!


Emma Taylor


Hi there!
Would you like to get such a paper?
How about getting a customized one?

Couldn't Find What You Looking For?

Get access to our huge knowledge base which is continuously updated

Next Update Will Be About:
14 : 59 : 59
Become a Member