Explanation

(a) Factors of production include: (i) land (ii) labour (iii) capital and (iv) entrepreneurship.

(i) Land includes all the gift of nature e.g. water, soil, air etc. It is used in production. Land is scarce .or limited in supply. It is immobile and heterogeneous and subject to the law of diminishing returns. The reward of land is rent. Land can appreciate or depreciate. Its suitability influences output and its location determines its value. Land can be used as collateral for bank loans.

(ii) Labour refers to all human effort put into production. Sources of labour include personal labour, community labour, family labour, hired. labour etc. could be skilled or unskilled. Its reward is salary or wages. Labour is regarded as a variable factor of production. Its output can be improved by training. It is mobile.

(iii) Capital refers to all man-made productive.assets which are used in production e.g. farm buildings, tools, money etc. It is mobile e.g. tractor. The amount determines volume or scope of operation. Its reward is interest. It can be circulatory or variable e.g. money seed, chick etc. Capital can be fixed e.g. building, machines etc. It can be obtained in form of loan or subsidies and can appreciate or depreciate

(iv) Entrepreneurship: refers to the person who cordinates, organises and controls other factors of production. He bears the risk. He implements decision. Entrepreneurship involves the use of mental energy in production. He minimizes cost of production and maximizes profit. His quality influences the output.

(b) (i) A farm manager plans all the farm operations (ii) He makes short and long term decision. (iii) He organises the farm enterprise and directs the smooth running of the farm. (iv) He also supervises all work done and sets up a mechanism that will enable him to determine the progress of the farm. (v) A farm manager coordinates and control various activities in the various farm units.

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