Economic Theory

Paper Summary:

The paper explains that factors of production and the five capitals model incorporate many different elements to produce the foundation for business in the free world. The paper discusses the factors of production that include land, labor and capital. They are used in the analysis of business to make sense of the production process and distribution. The paper relates that what makes them extremely valuable to the equation is their mutual exclusivity. The paper describes the five capital elements that are included as key factors in the five capitals model; natural, social, human, manufactured and financial capital. The paper emphasizes that these models are the basic foundation to any economics instruction.

Outline:
Introduction
Factors of Production
Five Capitals Model
Conclusion

From the Paper:

"The first recognized factor of production is land. For the purpose of classification in factors of production land is defined as everything in the universe that was not created by man. While it does include the surface of the earth it also includes many other elements. If it is a natural resource it is called land for the purpose of factors of production. This includes air, forests, minerals, earth, water and sunlight. While in other discussions these elements would be divided and classified differently for the purpose of factors in production they are all included in the term "land"."

Sample of Sources Used:

• Factors of production http://en.wikipedia.org/wiki/Factors_of_production
• gcse economics - factors of production http://www.tutor2u.net/economics/gcse/revision_notes/basics_factors_of_production.htm
• Factors of production http://www.landandfreedom.org/econ/econ2.htm
• Land as a factor of production. (Chapter 2). The American Journal of Economics and Sociology; December 1, 2002; 6,492 Words
• The Five Capitals Model http://en.wikipedia.org/wiki/Five_Capitals_Model

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