GCSE Economics 2025 – 400 Free Practice Questions to Pass the Exam

The element of production that refers to machinery and technology is capital. In economic terms, capital encompasses the tools, equipment, and technology that are utilized in the production of goods and services. It is distinct from the other factors of production in that it includes not only physical machinery but also financial assets that are used for future production. Capital is essential for increasing efficiency and enabling mass production.

While land refers to natural resources and labor denotes the human effort involved in production, capital specifically relates to the man-made assets that enhance productivity and are crucial for modern enterprises. Enterprise, on the other hand, pertains to the management and organizational skills required to combine land, labor, and capital effectively. Therefore, capital encompasses the machinery and technology that contribute to the production process.