![]() ![]() Many companies may require a specialized labor force and locate in an area where these highly educated or trained individuals live. Education improves the quality of a country's labor pool. China, India, and Japan are countries that have taken advantage of a large available workforce to establish manufacturing plants. Countries with a large labor pool may specialize in manufacturing. Quantity and quality of labor are important considerations when evaluating the contribution this factor makes to a country's economy. Labor includes everyone except the entrepreneur (who is put in a separate category). Kuwait has taken advantage of its enormous crude oil deposits. Other countries may have an abundance of a valuable resource and exploit it. Many countries, like Japan, are constrained by a limited supply of resources and depend on importation. Economists lump all natural resources into the "land" category, such as water, diamonds, timber, gold, farmland, and crude oil. Those countries with limited factors of production will normally specialize in industries to take advantage of the factors they possess. Countries with an abundance of all the factors of production should thrive. The factors of production include labor, capital, land, and entrepreneurship. Detailed Explanation:Īn adequate supply of the factors of production is essential to building a sustainable business. ![]() View FREE Lessons! Definition of Factors of Production:įactors of production are the resources used in the ongoing production of goods or services. ![]()
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