Scarce goods are those for which the demand would be greater than the supply if their price were zero. D) natural resources. B) In order to produce anything, it is necessary to have factors of production. Entrepreneurship as a Factor of Production Entrepreneurship is the drive to develop an idea into a business. When illustrated graphically, the production possibilities model typically limits our analysis to two goods. The production can be increased only by increasing the quantity of the variable factors or by having additional shifts or by increasing the hours of work. Factors of Production An alternative term used by economists when talking about resources. C) Factors of production include land, labor, capital, and entrepreneurship. D) Only those resources that are privately owned are counted as factors of production. Economic goods are goods and services that require scarce resources or factors of production to produce them. Factors of production are the inputs needed for the creation of a good or service. C Market failure occurs when: A) markets are competitive. The most successful are innovative risk-takers. C) capital. Member since 20 June, 2011. A factor of production that has been produced for use in the production of other goods and services is: A) labor. Prateek Agarwal’s passion for economics began during his undergrad career at USC, where he studied economics and business. A) Factors of production are also known as resources. Things like labor, entrepreneurship, land and capital are common examples of these. B) money. Given the economy’s factors of production and technology, the economy can produce various combinations of the two goods. Thus, if the input is scarce in relation to the need for it, it is regarded as a factor of production. Factor of production that includes natural resources not created by humans: Capital: factor of production that includes tools, equipment, machinery, and factories used in the production of goods and services. Answer: D Type: Definition Page: 4 14. Prateek Agarwal. According to Eraser, “Factor of production as a group or class of original productive resources.” The production process of an organization can be efficient, if there is an optimal use of factors. An entrepreneur combines the other three factors of production to add to supply. Because of this shortage, economic goods have a positive price in the market. The factors of production attempt to instill the idea that resources are scarce. The factors of production include land, labor, entrepreneurship, and capital.   These are often scarce resources. 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