Factor of Production: Capital example

Factor of Production: Capital example

I have always found it really exciting to explain this concept. Ok now we are going to being. First of all determine what is the thing which is made by the man and what it is this which is available naturally?  All those man-made things which facilitate the production process and included in capital.

Imagine that you have a factory of mineral bottles. If you are taking the water from the lakes the water from the lake would be included in land. The machinery which is purifying the water would be called the capital as the machinery is made by the people. The people who would be working in the factory would be regarded as labor.