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Introduction to Business Lecture 2 by Prof. Mohsin Rauf. The Factors of Production with examples. - YouTube
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Hi, I am Mohsin Rauf.
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And this video is part of the series of videos
recorded for the course titled Introduction to
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Business. In this video I will be talking about
“The Factors of Production” in a business.Factors
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of production are the inputs needed for creating
a good or service. These include: Labor,
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Natural Resources, Capital, Entrepreneurial
Talent, Intellectual Property and Technology.
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So, let’s try to understand each of The
Factors of Production, one at a time.
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The first factor of production is called labour.
Labor is the effort that people contribute
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to the production of goods and services. For
example, labor resources include both the cook
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who prepares food for you as well as the waiter
who serves you with food at a local restaurant.
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Another example can be a mason who
lays bricks to construct a building,
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or a bus driver who drives a
bus to and from the school.The
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second factor of production is called natural
resources. Natural resources are raw materials
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provided by nature that are used to produce goods
and services. For example oil, coal, natural gas,
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metals, stone and sand, they all are natural
resources. Other examples include air, sunlight,
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soil and water, animal, birds, fish and all sorts
of plants are examples of natural resources.The
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third factor of production is called capital.
Capital refers to both real capital and financial
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capital.Real capital refers to assets that
are used for producing goods and services.
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Real capital means the physical facilities
used to produce goods and services. All items,
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like machinery, tools, and buildings, that
are directly used for manufacturing goods or
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services are called capital goods. Financial
capital is the money used for purchasing
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the capital goods.The fourth factor of production
is called entrepreneurial talent. Entrepreneurial
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talent means an entrepreneur’s ability to assume
the risk of creating, organizing, and operating a
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business and directing all of a business’s
resources to achieve business objectives.
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Entrepreneurial skills include a broad range
of various skill sets like technical skills,
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leadership and business management
skills, and creative thinking.The
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fifth factor of production is called intellectual
property. Intellectual property consists of
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privately owned, intangible assets developed as
a result of people’s intellect and creativity.
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Intellectual property or IP refers
to creations of the mind, such as
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innovations, literary and artistic works, designs,
symbols, names, and images used in commerce.
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The sixth and the last factor of production
is called technology. Technology refers to
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goods and services that make businesses
more efficient and productive.
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Examples include information technology
which consists of computers and the internet.
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Another example can be medical technology that
includes MRI machines and artificial organs.So,
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this concludes lecture number two about the
course titled Introduction to Business. I hope
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this video was helpful to understand some of
the business concepts. Please subscribe to my
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channel and share this video with others.
And if you have a question or a comment
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please feel free to write them
down below. Thank you very much.
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