To produce goods and services businesses use resources – also known as factors of production.  The factors of production are land, labour, capital and enterprise.

• Land – natural resources – raw materials used in the production of goods.  Examples include coal, oil, timber, metals, fish, water, crops, and livestock.

• Labour – human resources – workers who produce goods eg factory workers, farmers. For services, labour will deliver the service eg electrician, hairdresser, shop worker.

• Capital – man-made resources – machinery or equipment used to produce a good or deliver a service. This includes premises, factory equipment, vehicles, fixtures and fittings. These can be referred to the assets of a business.

• Enterprise – a role of an entrepreneur is to organise the other factors of production so that goods and services are produced.

How Businesses Satisfy Wants 

Business organisations see the needs and wants that consumers have and produce goods and services to meet these needs and wants.

Consumers buy the goods and services and their needs and wants are satisfied by consuming these products.

The cycle is a continual process because consumer wants are unlimited.