The Anatomy of Factor Markets

MyEconLab Concept Video

The four factors of production are

  • Labor

  • Capital

  • Land (natural resources)

  • Entrepreneurship

The services of labor, capital, and land are traded in factor markets, which determine their factor prices. Entrepreneurial services are not traded in markets and entrepre­neurs receive the profit or bear the loss that results from their decisions. Let’s take a brief look at the anatomy of the factor markets.

Markets for Labor Services

Labor services are the physical and mental work effort that people supply to pro­duce goods ...

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