Economic resources Flashcards
(18 cards)
What are the factors of production?
Land, labour, capital, enterprise
These are the resources used to produce goods and services.
Define goods in the context of production.
Physical objects that can be touched (tangible)
Example: mobile phone
Define services in the context of production.
Actions or activities that one person performs for another (intangible)
Example: manicure, car wash
What does land refer to in the factors of production?
Non man-made natural resources available for production
Example: oil, iron ore, rubber
What is meant by labour in the production process?
The human input into the production process, involving mental or physical effort
Labour can be skilled or unskilled.
What does capital mean in the context of production?
Any man-made resource that is used to produce goods/services
Examples: tools, buildings, machines, computers
What is enterprise in the factors of production?
Involves taking risks in setting up or running a firm
An entrepreneur decides on the combination of factors of production.
List some factors of production required to produce a motor car.
- Land
- Labour
- Capital
- Enterprise
What are the financial rewards (factor income) for land?
Rent
What are the financial rewards (factor income) for labour?
Wages
What are the financial rewards (factor income) for capital?
Interest
What are the financial rewards (factor income) for entrepreneurship?
Profit
What is the environment considered in terms of production?
A scarce resource
Environmental resources are raw materials that come from nature.
What does increased economic activity cause?
Degradation of environmental resources
What are non-renewable resources?
Resources that are limited in supply and will run out quickly
Example: coal, oil
What are renewable resources?
Resources that should be infinite in supply
Example: water, air
What is sustainability?
Meeting the needs of the current generation without compromising the needs of future generations
Fill in the blank: The factor income for entrepreneurship is _______.
profit
