Four factors of production | AP Microeconomics | Khan Academy

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Economists traditionally divide the factors of production into four categories: land, labor, capital, and entrepreneurship. Learn how each of these are defined in this video.
AP(R) Microeconomics on Khan Academy: Microeconomics is the study of individual decisionmakers in an economy, such as people, households, and firms. Learn how markets work, how incentives drive decisionmaking, and how market structure influences market outcomes. We hit the traditional topics from an AP Microeconomics course, including basic economic concepts, markets, production and costs, profit maximization perfect competition, imperfectly competitive market structures, game theory, factor markets, and income inequality.
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[@ironic_iron8770]

Yesss, I'm in my first Economics class right now

[@bradendredge6809]

Technology technically refers to systems and processes, not just machines, so it makes sense that it’s placed along with entrepreneurship. Entrepreneurs must create said systems.

[@RiverHeights]

Capital actually does include money. In economics, capital can be defined as the physical or financial resources used to produce value in an economy.

[@jiyoonkim4883]

Understanding the four factors of production-land, labor, capital, and entrepreneurship-helps us see how goods and services are made in our economy. Each is important: land gives us natural resources, labor is people working, capital makes work easier with tools and machines, and entrepreneurship brings new ideas and helps our economy grow.

[@curtpiazza1688]

Great illustrations! 😊

[@zakariyemagafe7939]

Thanks from Somalia

[@jaydenmann447]

I want to know how he has been talking on here for 11 years.

[@omarrayan9121]

Because he's a Bangladeshi

[@thomaslondonderry7341]

@@omarrayan9121 no he isn’t

[@mantosh56]

@@omarrayan9121 How is that relate -_- hes also indian too does that matter?

[@mantosh56]

Well......hes dedicated to teaching others and likes what hes doing......thats why hes speaking for 11 years imo

[@jaydenmann447]

@@mantosh56 true, true.

[@RedFox110]

Good 😌 thanks

[@kashyap10642]

why is this channel underrated... ahh jt should've 20..25 M subsc..

[@ahbabaziz]

If capital is anything that is used to produce other things, then how is the returns of capital interest. You clearly stated here that capital is NOT money as it is with finance, but that would correctly hint to the return of capital being interest as stated in my textbook. I finished my HSC (Year 12 and this was in a Year 11 course, but I look back on this and somehow I did not completely understand this).

[@Mariam_aam]

Is the factory under capital or land?

[@mrinalsharmaxa1925]

The factory will come under capital

[@Mariam_aam]

mithu sharma already figured it out but thanks anyways

[@nkusa2010]

Thanks excellent man

[@scatz4994]

hi, I'd like to ask about capital. Can "skills" also be considered in capital? or is it better to put it in entrepreneurship?

[@vedangdugar2422]

Entrepreneurship is SKILLS

[@Milkaerys]

Capital is further divided into several types, and one of them is Human Capital (i.e: Education, training, skills, health, etc. Of the workers/ labour force). Human capital (in this case; skills of the labour force) will increase the productivity of labour and increase the value of the employee, therefore, it’s considered as capital.

[@madnessoflife4156]

which factor of production earns the most income and why?

[@RiverHeights]

I would say between land, and Labor. Land is limited, so it can get very expensive, and will continue to get more and more expensive. In some countries, Labor is also limited due to lack of education. At the end, it really depends. Economies differ from each other.

[@ChessMasteryOfficial]

*Understand that half the game is keeping quiet, and carefully watching those around you. ♧*

[@noname-mw7oy]

Genuine question if anyone knows please respond: my wallet in an economic sense is capital because it holds my cards and other important objects which allow me to live properly? Or a book is capital because it holds knowledge that will allow me to produce things in the future?

[@rahulkaushik4194]

Book here is a Capital Good since it provides you the knowledge which you can use to be productive and consume consumer goods. On the other hand, you wallet has Cards and money which is a consumable good since you can trade it off in exchange for other consumable goods.

[@ssticky]

wallet is not capital as it is a store of value and does not directly produce anything.

[@bradendredge6809]

Technology technically refers to processes and systems, and not just machines. So it makes sense that it’s synonymous with entrepreneurship in this list.

[@sofiyateacher1892]

Thanks from Kazakhstan

[@Mohitreet]

nice

[@shivmessi6155]

very helpful thank you

[@bureaffari3694]

So land and labour can also be classified as capital. Now we need entrepreneurship and capital.

[@colinburgess4316]

A prostitute is a self contained microeconomy. Amazing. A brothel might be analogous to macroeconomics. I hope this helps.

[@sailajapulipaka3494]

do 'organization 'come in the factors of production??

[@raghavbansalvlogs657]

Which factor of production will be fertilisers

[@imisterterrific]

Human capital - entrepreneur

[@adieu2141]

Why isn't entrepreneurship counted in labor? Does it mean labor only counts physical and repetitive work?

[@grunklesmuff]

The difference between entrepreneurship and labor in the context of the four factors of production derives from the differing nature of their economic roles. While both contribute to the production process, they represent different and distinct aspects of economic participation. Entrepreneurship is separate because it involves more than the physical and mental effort associated with labor. Entrepreneurship is really the initiation of business opportunities, the organization of resources (including land, labor, and capital), and the willingness to undertake risks to create and expand a business. It is usually viewed and known by innovation, decision-making, and the overall management of the production process. Labor on the other hand usually refers to the physical and mental efforts expended by people to produce goods and services. It spans a broad range of tasks, from manual to skilled and intellectual work. The difference also extends to risk and decision-making. Entrepreneurs take on significant risks related to investment, innovation, and strategic decisions, labor while contributing to decision-making within roles, usually does not take on the broader business risks associated with entrepreneurship. Moreover, ownership and control play a role in distinguishing the two. Entrepreneurs often have ownership stakes in the ventures they create, allowing them a good degree of control over the business and the potential for substantial returns. Employees, on the other hand, are usually compensated through wages or salaries for their labor without having the same level of ownership or control as the entrepreneurs usually do.

[@ThenightskyofMike]

I come form my class

[@1415Khan]

Can anyone tell me why does capital recieve interest from the revenues. Can't we just say that we bought capital items.

[@demetriusprimanto6403]

Can we consider workers/humans as Capital too? Since they are "made" to produce other things (?)

[@Milkaerys]

The skills, knowledge and experience of the labour force is identified as a type of capital (Human Capital to be specific). Human capital increases the productivity of labour, which will help the workers to produce other goods. So, the skills of the workers are considered as Capital. But, the physical and mental contribution of the workers to produce goods are considered as labour. Labour and laborer cannot be separated. So the workers/humans themselves belong to labour, but their skills and knowledge belong to capital.

[@sumeetkaur3942]

Here we are talking about physical capital.Plant , machinery ,tools equipments

[@Michcos]

What the difference between AP course and the normal one?

[@kevinswift8654]

AP(Advanced Placement), in the US, is a college-level course that students can take while they are still in high school. If you pass the AP examination at the end of the year, it can count towards credit at whatever college you choose to attend. Short answer: it's college courses that you take in high school.

[@tourmelion9221]

So do things like corn or oil or complex goods fall under capital or land Like say I am a cake maker I buy meringues Or candied cherries It's not a natural resource But not a tool either Where does it go

[@RiverHeights]

A cake maker is the entrepreneur and Labor. I don't know what candled Cherries, and Meringues are

[@insxmniac7052]

meringues or candied cherries would be capital, it was produced by someone and utilized by you to make something else (the cake). Corn once harvested is a good, if someone buys it and turns it into popcorn and then sells the popcorn, the corn changes from good to capital. The flour you utilized for the cake is capital ( you used the flour to produce the cake), the grain used to make the flour? Capital. The grain used for planting crops? Capital. Something is only capital if it is produced by someone ( not natural ) and then sold to someone with the intention of it being used in the production of something else. So it is dependant on the context of its utilization. I can have flour and sell it to someone who makes cakes and sells them, then it turns into capital. Or I can use the flour and make a cake myself and eat it, making it a good which I consumed.

[@nathanwoods1810]

If math isnt my strongest...would it be wise not to study econ?

[@hannesssss]

i would call it DESIGN instead of entrepeneurship or technology, to connect things to acchieve a goal (an emergent phenomena in a way...). and there are no real border between production and consumption goods, because every consumption good is in a way needed to maintain the production and vice versa.... the plants on the farm are in a way capital aswell, they are in place to produce the fruits, that get packaged to became the product... just a few thoughts i got by your great video, i understood the meaning of capital thanks to you space energy capital design

[@keatts23]

is design also perhaps an aspect of enterp. ? Or a way of looking at it? you can do it without thinking about design or with a full on design thinking approach. ? Or as you imply maybe it can all be related to design in some way?

[@joshbartholomew165]

sooooooo is labor really capital?

[@joeljacobnaveen5803]

🙂

[@survivw2011]

Idk what to say

[@ugestacoolie5998]

entreprenueurs, mans behind the scene

[@3pleLL]

Are animals considered capital or land?

[@RiverHeights]

Land. They are natural

[@neyhaaaa]

@@RiverHeightsI think capital.they are movable I'm not sure about my argument plz correct me if I'm wrong

[@RiverHeights]

@@neyhaaaa Good point. Here's another way to think of it. Wood counts as land. But we can move wood. Even soil counts as land, but we can also move soil from one place to another. People even sell soil haha. The best way to think of it (at least for me) is to think of it as everything natural. Natural resources are land.

[@neyhaaaa]

@@RiverHeights they are animals so i think we should consider their reproduction factor which gave us more and more resources in future for make money but land is still land is not only soil you can move soil but not the whole land I don't know I'm right or wrong I've doubt and all these questions are arising in my head. if you know some other factors which can make me understand the concept of capital then please do share

[@neyhaaaa]

@@RiverHeights people are also natural they are also considered land ??

[@dylanbradley321]

4:52

[@GetKnowledgeByYasir]

good work

[@ChaudharyGamingYt]

Please make videos in Hindi Language also. Request from Sports 360 Team.

[@pitat886]

@AlexandriaOcasioCortez

[@patpatrik764]

@realdonaldtrump

[@aabb-ev1vh]

None of this is somehow conflitcting with socialism. Quite in contrary, socialism offers solutions for problems like the tragedy of the commons.

[@bernicemarieresti]

hi grade 9

[@behruzlife]

35 like I am from Uzbekistan

[@jbenkidu]

Gave thumbs down

[@RupsinhPargi]

Harsh_pragi_94