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  • Essay / Factors of Production Essay - 984

    As we all know, our economy is driven by what we call the drivers of globalization in order to progress and meet people's needs and desires for survival. What the economy offers them begins as resources, which is one of the two main production problems. Due to scarcity of resources, we are unable to produce the correct quantity of goods and services to satisfy the unlimited desires of the customer. The production of goods and services using the available resource is achievable thanks to what are called factors of production. Secondly, opportunity cost plays its role in the production of goods and services through the factors of production. To simplify and illustrate the production process 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, they are the engines of globalization that work together to operate the economy and produce goods and services to help people survive and satisfy their needs and wants. Land is where natural raw materials such as crops, oil, wood and coal are extracted before the production stage. Due to the large populations of China and India, Investopedia states that these countries are known to be the leading agricultural producers in the world. Since they have a very large number of people in the country, they are forced to increase crop production on their agricultural lands and produce food products to fuel the economy. The extraction of raw materials and natural resources can be done through the second. factor of production which is work. The work process involves human effort and productivity to maintain a well-being workforce. Brazil's coffee production is established...... middle of paper ....... Point C, on the other hand, illustrates quite the opposite; an increase in the use of resources to produce more cars than refrigerators. Finally, point B equalizes the amount of resources used to produce equal cars and refrigerators. Points X and Y which do not lie on the productivity possibility frontier illustrate two situations in the economy: point Y is when the economy outperforms, which is impossible due to resource scarcity. In conclusion, the economic situation of each country differs from another due to the availability and scarcity of resources. A productivity opportunity frontier clearly simplifies what the production of goods and services looks like in specific countries for economic benefits such as economic growth..