 According to Mc Connel (1996)

1.Land – Means much more to the economist

than to most people. Land is all natural
resources all gifts of nature usable in the
productive process. Such resources as arable
land, forests, mineral and oil deposits, and
water resources.
2. Capital – Investment goods, is all
manufactured aids to production, that is, all
tools, machinery equipment, and factory,
storage, transportation, and distribution
facilities used in producing goods and services
and getting them to the ultimate consumer.
3. Labor – A special sets of talents
entrepreneurial ability which, because of
their special significance in a capitalistic
economy, we consider separately.
- The services of a logger, retail clerk,
machinist, teacher, professional football
player, and nuclear physicist all fall
under the general heading labor.
4. Entrepreneurial Ability – It is the special
human resource or labeled as
entrepreneurial ability, or, simply,
enterprise.
1. The entrepreneur takes the initiatives in
combining resources of land, capital, and
labor to produce goods and services –
Both spark plug and a catalyst. The
entrepreur is the driving force behind
production and the agent who combines
the other resources in what is hoped will be
profitable venture.
2. The entrepreneur makes basic business-
policy decisions – that is, those non-
routine decisions which set the course of
the business enterprise.
3. The entrepreneur is an innovator – He is the
one who attemps to introduce on a
commercial basis the new products, new
productive tecniques, or even new forms
of business organization.
4. The entrepreneur is a risk bearer – This is
apparent from a close examinationof the
other three entrepreurial functions. The
entrepreneur in a capitalistic system has no
guarantee of profit. The reward for the
time, efforts, and risk not only time, effort,
and business reputation, but invested funds
and also those of associates of stock
holder.
1. Traditional Economy – Production methods,
exchange, and distribution of income are
all sanctioned by custom.
2. Command Economy – All major decisions
concerning the level of resource use, the
composition and distribution of output and
the organization of production are
determined by a central planning board.
3. Mixed System – Government plays an
active role in our economy in promoting
certain goods services which would be
under produced or not produced at all by
the market system, and in modifying the
distribution of income.
THE END
Reporter: Honey Belle G. Baldera
BSF - 111