3) Factors of Production - MB

Question 1

Factors of Production:

what is a positive statement?

Answer 1

• a statement about what IS

- i.e. about facts

Question 2

Factors of Production:

what is a normative statement?

Answer 2

• a statement involving a value judgement about what OUGHT TO BE

Question 3

Factors of Production:

what is a value judgement?

Answer 3

• a statement based in your opinion or beliefs, rather than on facts

Question 4

Factors of Production:

what is a factor of production?

Answer 4

• resources used in the production process, or INPUTS into production, including:
• land, labour, capital and enterprise

Question 5

Factors of Production:

what is land?

Answer 5

land is natural resources; both geographic land and raw materials

Question 6

Factors of Production:

what is labour?

Answer 6

labour is human resources; work done by people

Question 7

Factors of Production:

what is capital?

Answer 7

capital is manufactured resources; the stock of past production used to aid current production

Question 8

Factors of Production:

what is an example of capital?

Answer 8

wind turbines

Question 9

Factors of Production:

what is enterprise?

Answer 9

enterprise is a different human resource to labour; entrepreneurs take risks by organizing the other factors of production

Question 10

Factors of Production:

the reward for land is…

Answer 10

rent

Question 11

Factors of Production:

the reward for labour is…

Answer 11

wages (hourly) (and salaries ( annual))

Question 12

Factors of Production:

the reward for capital is…

Answer 12

interest

Question 13

Factors of Production:

the reward for enterprise is…

Answer 13

profit