Three primary examples of factor markets are labor, land and capital. These factors are required to produce a good or service and can be broken down into smaller individual factors, such as the various natural resources that are derived from the overall factor market of land. Labor can also be divided into the factor markets of unskilled labor, skilled labor and the entrepreneurial skills needed to staff and launch the firms that will produce a good or service.Know More
The required factors of production are purchased by the producer companies in the factor markets. Almost all of the resources and services required for production can be considered part of the factor market when they are traded for during the production process. The basic unit of trade within the factor market of labor is the wage rate. In addition to production resources such as water, natural gas and minerals, capital is a much-needed production resource for which the unit of trade is the interest rate charged by lenders.
Factor markets are affected by the same dynamics as the markets for the produced goods for which they are required. As the demand curve and price elasticity of the finished product alters its demand and market price, the factor markets required for that product are also affected. The interaction between production markets and their associated factor markets reflects the economic principle of derived demand.Learn more about Economics
Heating oil prices are affected by seasonal demands, changes in the cost of crude oil, competition in markets and operating costs. The price consumers pay differs over time and depends on where they live.Full Answer >
The Federal Reserve Bank of St. Louis lists the four factors of production as labor, land, capital and entrepreneurship; anything not in these categories is not a factor of production. Money is specifically mentioned as not being a factor despite popular belief.Full Answer >
In basic economics, labor resources, or simply labor, is one of the three major factors of production, the other two being land and input. In the broadest sense, labor can be defined simply as the ability to work or supply workers to a given industry or economic sector.Full Answer >
Net factor income from abroad is the amount of money made in a country other than one's legal home country, according to Investopedia. This term applies to income made by either an individual or a business and refers to income made abroad that is then sent back to the home country. This income can come in the form of wages or investments.Full Answer >