Crude oil is not an example of a factor of production, but when crude oil is processed into petrol, it is a factor of production.

Question

Quizplus · Accepted Answer

Crude oil is actually considered a natural resource or raw material, rather than a factor of production. Factors of production refer to the resources or inputs that are used in the production process to create goods and services, including labor, capital, and entrepreneurship. However, once crude oil is processed into petrol, it becomes a factor of production as it is now a usable input in the production of other goods and services, such as transportation or manufacturing.

Crude Oil Is Not an Example of a Factor of Production