Ch.2- Factors of Production

Question 1

Factors of production

Answer 1

The economic resources of land, labour, capital and enterprise

Question 2

Land

Answer 2

Gifts of nature available for production

Question 3

Labour

Answer 3

Human effort used in producing goods and services

Question 4

Capital/capital goods

Answer 4

Human-made goods used in production.

Question 5

Consumer goods

Answer 5

Goods and services purchased by households for their own satisfaction

Question 6

Enterprise

Answer 6

Risk bearing and key decision making in business

Question 7

Occupationally mobile

Answer 7

Capable of changing use

Question 8

Geographically immobile

Answer 8

Incapable of moving from one location to another location

Question 9

Mobility of labour

Answer 9

The ability of labour to change where it works or in which occupation

Question 10

Mobility of capital

Answer 10

The ability to change where capital is used or in which occupation

Question 11

Mobility of enterprise

Answer 11

The ability to change where enterprise is used or in which occupation

Question 12

Entrepreneur

Answer 12

A person who bears the risks and makes the key decisions in a business

Question 13

Labour force

Answer 13

People in work and those actively seeking work

Question 14

Productivity

Answer 14

The output per factor of production in an hour

Question 15

Labour productivity

Answer 15

Output per worker hour

Question 16

Output

Answer 16

Goods and services produced by the factors of production

Question 17

Investment

Answer 17

Spending on capital goods

Question 18

Gross Investment

Answer 18

Total spending on capital goods

Question 19

Depreciation (Capital consumption)

Answer 19

The value of capital goods that have worn out or become obsolete

Question 20

Net investment

Answer 20

Gross investment minus depreciation

Question 21

Negative net investment

Answer 21

A reduction in the number of capital goods caused b some obsolete and worn out capital goods not being replaced