What are they key factors for

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What are they key factors for

Physiocracy[ edit ] Physiocracy from the Greek for "government of nature" is an economic theory developed by a group of 18th century Enlightenment French economists who believed that the wealth of nations was derived solely from the value of "land agriculture" or "land development" and that agricultural products should be highly priced Classical[ edit ] An advertisement for labor from Sabah and Sarawak, seen in Jalan Petaling, Kuala Lumpur.

The classical economics of Adam SmithDavid Ricardoand their followers focus on physical resources in defining its factors of production and discuss the distribution of cost and value among these factors. Adam Smith and David Ricardo referred to the "component parts of price" [6] as the costs of using: Land or natural resource — naturally occurring goods like water, air, soil, minerals, flora, fauna and climate that are used in the creation of products.

The payment given to a landowner is rentloyalties, commission and goodwill. Labor — human effort used in production which also includes technical and marketing expertise.

The payment for someone else's labor and all income received from one's own labor is wages. Labor can also be classified as the physical and mental contribution of an employee to the production of the good s.

The capital stock — human-made goods which are used in the production of other goods. These include machinery, tools, and buildings.

They are of two types, fixed and working. Fixed are one time investments like machines, tools and working consists of liquid cash or money in hand and raw material The classical economists also employed the word "capital" in reference to money.

Money, however, was not considered to be a factor of production in the sense of capital stock since it is not used to directly produce any good. The return to loaned money or to loaned stock was styled as interest while the return to the actual proprietor of capital stock tools, etc.

Marx considered the "elementary factors of the labor-process" or " productive forces " to be: Labor The instruments of labor or means of labor. The "instruments of labor" are tools, in the broadest sense. They include factory buildings, infrastructure, and other human-made objects that facilitate labor's production of goods and services.

This view seems similar to the classical perspective described above. But unlike the classical school and many economists today, Marx made a clear distinction between labor actually done and an individual's " labor power " or ability to work.

Labor done is often referred to nowadays as "effort" or "labor services. Labor, not labor power, is the key factor of production for Marx and the basis for Marx's labor theory of value. The hiring of labor power only results in the production of goods or services " use-values " when organized and regulated often by the "management".

How much labor is actually done depends on the importance of conflict or tensions within the labor process. Neoclassical economics[ edit ] Neoclassical economicsone of the branches of mainstream economicsstarted with the classical factors of production of land, labor, and capital.

However, it developed an alternative theory of value and distribution. Many of its practitioners have added various further factors of production see below.

Further distinctions from classical and neoclassical microeconomics include the following: Capital — This has many meanings, including the financial capital raised to operate and expand a business.

In much of economics, however, "capital" without any qualification means goods that can help produce other goods in the future, the result of investment. It refers to machines, roads, factories, schools, infrastructure, and office buildings which humans have produced to create goods and services.

Fixed capital — This includes machinery, factories, equipment, new technology, buildings, computers, and other goods that are designed to increase the productive potential of the economy for future years.The Oxford Food Bank collects unsold fresh food from local supermarkets and wholesalers that would otherwise be wasted We deliver it for free to over 80 Oxfordshire charities helping them to.

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What are they key factors for

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