The paper "Economics Analysis" is an impressive example of a Macro & Microeconomics assignment. Factors of production describe elements that support industry growth and the commercial world. They are the various resources used in the process of creating finished goods and services. The factors of production consist of land, labor, capital, and entrepreneur. It explains the role of the entrepreneur and how he organizes the other factors of production. The entrepreneur offers purpose and direction to the rest of the factors (Kates, 2014, p. 102). The factors of production enable a look into the relationship between the correlation between output and the inputs that are invested in production.
The cost of production is discussed and how it affects the price of the output. The traditional factors of labor, land, and capital are analyzed and how the impact on the production process. The initiation cost of production is attributed to these factors before other overheads like electricity, water, rent, interest rates, and postage are factored. It is the entrepreneur who organizes the other factors of production to come up with synergy that allows for the production process to take place.
He pays salary and wages to labor, capital receives interest while land receives rent. The resources are limited and require careful use. Without these factors of production, the production process cannot start. Resources in a particular country or region have to be organized by the entrepreneur in order to be used in the production process (Kates, 2014, p. 105). The entrepreneur takes the risk to invest in the resources of land, labor, and capital used in the creation of finished products. The human resource department in an organization is in charge of labor that works in exchange for salary or wages. Marginal analysis Marginal analysis is used to explain how products are priced.
Marginal analysis is the foundation of what can be changed in the future. The past is the base of decision making but what can only be altered is included to be part of the marginal analysis (Kates, 2014, p. 169). The marginal analysis involves comparing costs against the benefits of any decision made in the business.
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