Factors of Production and Economic Remuneration
Capital Factor Defined
Capital Factor: Means of production necessary to develop an activity.
Types of Capital
- Physical Capital: Material goods needed for the production of other goods or services. This can be fixed or circulating.
- Monetary or Financial Capital: Consists of funds or resources of an entity for the purchase of physical capital. This may be owned by the company or be third-party capital.
- Human Capital: The set of conditions and skills of individuals necessary to develop an economic activity.
Remuneration of Productive Factors
These are goods and services whose value is determined by different markets, meaning every factor must have a price.
Compensation for Factors:
- For the Land factor: Rent and taxes.
- For Labor: Wages (employee) or benefit (owner).
- For the Capital factor: Interest.
Definitions of Remuneration:
- Rent: Compensation received for land according to the value of its productivity.
- Tax: A cash benefit required by the state or its organs from economic subjects.
- Salary (Wage): Payment earned by workers as employees for the provision of services.
- Interest: The payment for the service of capital, or the price of a loan or credit.
Economic Operators
Definition
Operators are responsible for carrying out the production of different goods and services needed to satisfy human needs.
Role of Operators
Operators can function through the private sector or the public sector.
Private Sector Entities
- Families: Units of consumption that also own productive resources.
- Companies: Operators exclusively focused on the production of goods and services.
Types of Enterprise
According to the Industry Served
Transformation Enterprises
Involved in the production of goods:
- Agricultural and Livestock: Processing time for action.
- Industry: Transformation through physical or chemical processes.
- Extracts: Obtaining products in their natural state.
Commercial Enterprises
These companies buy and sell goods in the state they were acquired.
Service Enterprises
Services provided through the actions of caregivers or providers.
According to the Owner of Capital
- Private: Capital provided by joint owners or individuals.
- State: Capital provided by the state.
- Nationalized: Capital that was individual and passed to the state.
- Privatized: Entities that were part of public life and later moved to the private sector.