1.2 The Factors of Production Flashcards
(22 cards)
What are the four factors of production?
Land, Labour, Capital and Enterprise
What is the definition of land?
All the natural resources within an economy
What is the definition of labour?
All the human resources within an economy
What is the definition of capital?
All the man-made resources within an economy
What is the definition of enterprise?
The ability to take risks and run a business venture
Reward for labour?
Wages
Reward for Land?
Rent
Reward for Capital?
Interest
Reward for Enterprise?
Profit
How is the supply of land described as and why?
Fixed supply, as amount of land in existence remains the same
What is the quality of land determined by?
Soil type, fertility and weather
What is the term given to land since it cannot be moved around?
Geographically Immobile
Is land occupationally mobile, and why?
Yes, as it can be used for a variety of economic activities
What is the supply of labour determined by?
Number of workers available
List 3 factors that come under the number of workers available in an economy
- Population Size
- Retirement Age
- Years of Schooling
What is the quality of labour determined by?
Skills, education and qualifications of labour
How can labour achieve high occupational mobility?
If the workers have the right skills and qualifications they can have a high ability to change jobs
What 3 factors determine the geographical mobility of labour?
- Housing Costs
- Family priorities
- National laws on travel
What is the supply of capital determined by?
Demand for goods and services
How is the quality of capital determined?
By how many good quality products can be produced using the given capital
Explain the mobility of capital in terms of a office building and a pen
Office building is geographically immobile, but occupationally mobile.
Pen is both geographically and occupationally mobile.
Explain how supply of enterprise is determined?
Dependent on entrepreneurial skills
