Business: Factors Of Production

Question 1

There are four factors of production

Answer 1

Capital
Labour
Natural Resources
Entrepreneurship

Question 2

CAPITAL

Answer 2

Money needed to start, operate and expand a business.
Own Capital: The owner’s money that he saved/inherited and invested in his business.
Borrowed Capital: Money borrowed from friends, family or a bank. Must be paid pack.
Reward for borrowed capital?
Interest.

Question 3

Labour

Answer 3

Human physical & mental effort used to produce goods + services.
Unskilled labour: Manual labour, zero skills training but improves through experience.
Semi-skilled labour: Some level of expertise usually limited to one direction. Manual labour that requires skills.
Skilled labour: People with a qualification in particular field. More mental than manual.
Reward for labour? Salaries + Wages

Question 4

Natural resources

Answer 4

Land and other resources are needed to produce goods or services.
Without land, the business will not have a place to operate from.
All products and most services require some form of other natural resource.
Reward for Land? Rent payments.

Question 5

Entrepreneurship

Answer 5

Person that combines all the factors of production to produce a service or product.
There is a difference between an entrepreneur and a labourer.
Entrepreneurial ideas and actions direct what the business will do and how it will do it.
Reward for entrepreneurship?
Profit.

Question 6

ROLE OF
WORKERS IN A WORKERS IN A
BUSINESS BUSINESS

Answer 6

Labour is one of a business’ greatest assets.
Labour has human capital: The knowledge and skills that workers get by working for a business.
Human capital increases with experience and has value for workers and for business.
Workers also bring ideas and creativity to the business. This helps the business to keep growing and to stay competitive.

Question 7

FAIR EMPLOYMENT PRACTICES

Answer 7

It is important that businesses look after their workers.
The way in which employers and employees relate to each other in the workplace.
Unfair employment practices are illegal in South Africa and it is also bad for business.
Employees who are treated unfairly will not work hard or be loyal. They will not develop professionally and can treat customers badly.