Unit 18. The factors of production

Traditionally, production means a creation of services or the changing the materials into products. Economic resources comprise human beings and all the things they use to produce the goods and services which people want. In economics, these resources are described as factors of production. They are often classified into three main groups: natural, human and manufactured.

Natural resources are the resources provided by nature and not by human beings. The word land is used to describe the gifts of nature.

Human resources consist of the energies, skills and knowledge of the working population. These resources are described as labour.

The word capital is used to describe manufactured resources. They consist of such things as factories, machines, railway, roads, power stations, docks and so on.

Many economists include a fourth factor of production – the entrepreneur. This is the person (or persons) who organizes land, labour and capital into units of production. These units of production are described as firms.

Vocabulary Bank

to comprise	включать, содержать
human being	человек
main	главный
gift	подарок
knowledge	знания
labour (Am. labor)	труд
railway	железная дорога
road	дорога, путь
entrepreneur	предприниматель
to bring together	свести вместе

Exercises

Answer the following questions.

1. What does production mean?

2. What comprises human beings and all the things they use to produce the goods and services?

3. How are the factors of production classified?

4. Are natural resources provided by nature or by human beings?

5. What do human resources consist of?

6. What do manufactured resources consist of?

7. What is an entrepreneur?

8. What does he organize into units of production?

Match the English verbs with their Russian equivalents.

tо comprise	использовать
to produce	обозначать, значить
to use	обеспечивать
to provide	включать, содержать
to describe	организовывать
to consist	хотеть
to want	описывать
to organize	производить
to mean	состоять

Open the brackets and put the verb in the correct tense form.

1. Every day this plant (to produce) a lot of equipment.

2. Yesterday the foreign delegation (to arrive) at this factory.

3. This firm (just, to produce) a new model of this car.

4. Yesterday at 2 p. m. the director of this company (to sign) the documents.

5. Tomorrow at 5 p. m. we (to test) a new model of this plane.

6. Next year this factory (to receive) a lot of enquiries for its goods.

7. The company (to conclude, already) 4 contracts with the foreign partners.

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