Econ test chapter 1.2 (Factors of production)

Question 1

labour productivity

Answer 1

output per worker hour

Question 2

labour force

Answer 2

people in work and those actively seeking work

Question 3

Enterprise

Answer 3

The skills a business person requires to combine and manage the other factors of production

Question 4

Land

Answer 4

the natural resources required in the production process e.g wood, metal ores, agricultural produce

Question 5

Labour

Answer 5

the human resources required in the production process, including skilled and unskilled labour

Question 6

What are the rewards for land

Answer 6

Rent- income that comes from ownership of property (assets)

Paid by the tenants of the land resources

Question 7

Reward for labour

Answer 7

Wages and salaries- wages are paid on an hourly basis while salaries are paid a fixed amount per month

Question 8

Reward for capital

Answer 8

Interest- If interest rate is high, it becomes less worthwhile for businesses and households to borrow money for production purposes because the cost of borrowing is high and vice versa

Question 9

Reward for enterprise

Answer 9

Profit-The return for the enterpreneur’s good businesses ideas and running it.

Question 10

Mobility of land

Answer 10

might be used for various purposes e.g a vacant field can be used for growing crops or building a factory

Question 11

mobility of capital

Answer 11

equipment can be used for different purposes- e.g a factory can be used to manufacture cars or planes

Question 12

mobility of entrepreneurs

Answer 12

can also be mobile- e.g Elon musk went from founding paypal to Tesla

Question 13

geographical mobility

Answer 13

the willingness and ability of a person to relocate from one area to another for employment

Question 14

Why are some not geographically mobile

Answer 14

-family ties and related commitments:

-costs of living: between regions and countries, costs of living may be too high, meaning its uneconomical for a person to relocate

Question 15

occupational mobility

Answer 15

the ease with which a person is able to change between jobs

Question 16

What does the degree of occupational mobility depend on?

Answer 16

the cost and length of training required to change professions

Question 17

What helps labour occupational mobility

Answer 17

developing and training employees to improve their skillset as workers can perform a greater range of jobs

more access to finance- loans, investments makes it easier to afford other FOPs and manage them

Question 18

The more __________ and __________ mobile workers are in a country, its international __________ and _________ growth tends to be greater

Answer 18

occupationally, geographically, competitiveness, economic

Question 19

What is an example of quantity of land changing

Answer 19

rainforests declining at a faster pace

supply of land reducing because of soil erosion or increasing through land reclamation

Question 20

How can renewable be turned into non renewable

Answer 20

if resources are exploited; used faster than they are replenished (over-fishing, over-hunting)

Question 21

Quality of land (examples of it changing)

Answer 21

-fertiilisers may be used to increase fertility of land
-health of fish can be improved if firms stop polluting

Question 22

Quantity of labour

Answer 22

number of workers available and the number of hours they work

Question 23

What can influence quantity of labour (explain)

Answer 23

-The size of population

-age structure of population

-The school leaving age

-attitude towards working women

-working hours

-age range of labour force

Question 24

How can more be produced with the same number of workers

Answer 24

if the workers become more skilled, leasing to an increase in labour productivity

Question 25

What increases along with labour productivity

Answer 25

a country's output

Question 26

What does increase in quality of labour look like

Answer 26

carrying out more difficult tasks, working with more complex machinery and producing more and better products

Question 27

what influences quantity of capital

Answer 27

influenced by investment (spending on capital goods) which tends to increase over time

Question 28

Gross investment

Answer 28

The total value of the output of capital good produced

Question 29

depreciation/capital consumption

Answer 29

value of replacement capital (new capital that replaces old, worn out capital)

Question 30

net investment

Answer 30

the value of the extra capital goods made (the gross investment-depreciation)

Question 31

what happens if gross investment is less than depreciation

Answer 31

it means that some of the capital goods taken out of use are not replaced- called negative net investment

Question 32

quality of capital

Answer 32

advances in technology enable capital goods to produce a higher output and a better quality of output. e.g development of robotics in car production has increased the number of cars significantly

Question 33

how can quantity of entrepreneurs increase

Answer 33

lowering taxes on firms and less gov. reg. as it can encourage more people to set up businesses.

Question 34

quality of entrepreneurship

Answer 34

-receive better education, better training and more experience

Question 35

What can influence changes in the costs of production

Answer 35

-change in the national minimum wage: cost of labour increases -subsidies and taxes -government regulations

Question 36

what will increase quality of labour

Answer 36

improvement in education and healthcare.

Question 37

what two things can increase labour geographical mobility

Answer 37

more affordable cost of living- incentivises relocation as its more affordable better infrastructure and transport-makes commuting to work and travel easier and more affordable

Question 38

capital definition

Answer 38

man-made resource used in the production of goods and services, such as machinery, tools, and buildings.