Factors Of Production Essay

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As we all know, our economy is driven by what we call globalization drivers in order to progress and serve people their needs and wants of survival. What the economy offers them starts of as resources which is one of two main problems of production. Due to the scarcity of resources we are unable to produce the correct amount of goods and services to satisfy the customer’s unlimited desires. Production of goods and services using the available resource is achievable through what is known as factors of production. Secondly, opportunity cost plays its role in the production of goods and services through factors of production. To simplify and illustrate the process of production using available resources, a PPF is produced. The economy depends on four main factors of production which are land, labor, capital and enterprise. Through the factors of production are the drivers of globalization which work together to operate the economy and produce goods and services to help people with survival and to satisfy their needs and wants. Land is where natural raw materials such as crops, oil, timber, and coal are extracted prior to the production stage. Due to the large population of both China and India, Investopedia states that these countries are known to be the top agriculture producers in the world. Since they have such a largest amount of people residing in the country, they are forced to increase the production of crops on their farmlands and manufacture food products to feed the economy. The extraction of the raw materials and natural resources can be done through the second factor of production which is labor. The labor process involves human’s effort and productivity to maintain a wellbeing workforce. Brazil’s coffee production sets ... ... middle of paper ... .... Point C on the other hand illustrates the total opposite; an increase in the usage of resources to produce more cars than refrigerators. Lastly, point B equalizes the amount of resources used to produce equal cars and refrigerators. Points X and Y which do not lay on the productivity possibility frontier illustrate two situations in the economy; X meaning the economy is underachieving and not utilizing the available resources for production whereas point Y is when the economy is overachieving which is impossible because of the scarcity of resources. In conclusion, the economic statue of every country differs from another due to the availability and the scarcity of the resources. A productivity possibility frontier clearly simplifies how the production of output of goods and services in specific countries looks like for economic benefits such as economic growth.

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