• Human capital refers to the knowledge, skills, and abilities of an individual that can be used to produce economic value. It includes things like education, training, and experience.
• Physical capital refers to tangible assets that can be used to produce economic value, such as machinery, buildings, and equipment.

• Specialization refers to the concentration of effort and resources on a specific area of production.
  • It involves focusing on producing a specific good or service, rather than trying to produce a wide range of goods or services.
• Division of labor refers to the separation of tasks within a production process among different workers.
  • It involves breaking down a complex production process into smaller, simpler tasks and assigning them to different workers, each of whom is responsible for a specific task.
• Benefits:
  • skill match between tasks and worker's talent, thus more productive;
  • improved skills through repetition;
  • less between-job switches;
  • easier to replace worker

• Problems:
  • work becomes repetitive, so the boredom may lower worker motivation, and productivity and quality;
  • low transferability of skills
  • lack of product variety

The role of the entrepreneur in contemporary economies is to identify and capitalize on new business opportunities by taking on risk and organizing the other factors of production (such as capital, labor, and resources).

• Risk-taking: Entrepreneurs are willing to take risks in order to start and grow new businesses. This includes putting their own capital on the line, as well as taking on the risk of not knowing if their business will be successful.
• Organization: Entrepreneurs are responsible for organizing the other factors of production in order to create a successful business. This includes hiring and managing employees, securing funding, and acquiring resources such as equipment and materials.
• Innovation: Entrepreneurs are often at the forefront of introducing new products, services, and technologies to the market. They are constantly looking for new and better ways to meet the needs of consumers and businesses.
• Flexibility: Entrepreneurs are often able to adapt to changing market conditions and find new opportunities. This allows them to survive in a volatile and dynamic business environment.
• Job Creation: Entrepreneurs create jobs by starting new businesses and expanding existing ones, which in turn contributes to the economy.