Factors of production

Question 1

economic problem

Answer 1

satisfying people’s unlimited wants and need with limited resources

Question 2

4 factors of production

Answer 2

natural resources
labour
capital
entrepreneurship

Question 3

natural resources

Answer 3

those resources extracted from nature that humans need to produce goods and services

Question 4

labour

Answer 4

all human effort provided by people to earn remuneration

Question 5

capital

Answer 5

man-made resources used to produce more goods and services

Question 6

entrepreneurship

Answer 6

the person who takes initiative to start the business, organize its production and take risks

Question 7

why are natural resources scarce

Answer 7

there are not enough natural resources in the world of required quality to make all things that people might want

Question 8

remuneration for natural resources

Answer 8

rent

Question 9

what leads to international trade

Answer 9

surplus of resources in one country and the scarcity of resources in another

Question 10

what are the characteristics of natural resources (4)

Answer 10

scarce
have a price
unevenly distributed
mostly not very useful in their natural form

Question 11

importance of natural resources (2)

Answer 11

serve as inputs for production
provide opportunity for int trade

Question 12

what four industries of natural resources provide economic significance

Answer 12

agriculture
forestry
fisheries
mining

Question 13

3 types of labour

Answer 13

skilled
semi-skilled
unskilled

Question 14

4 characteristics of labour

Answer 14

has income as a goal
is part of its owner
not storable
supply cannot suddenly increas

Question 15

why can labour not be separated from its owner

Answer 15

the labour and the person doing the labour are one and the same

Question 16

why is labour economically significant

Answer 16

production cannot take place without physical and mental effort and an economy needs to increase its production in order to grow

Question 17

remuneration for labour

Answer 17

salaries and wages

Question 18

difference between nominal and real wages

Answer 18

nominal - amounts that the worker receives each week
real - amount of goods and services that a person can buy (buying power of wages)

Question 19

2 types of capital

Answer 19

money and real

Question 20

difference between money and real capital

Answer 20

money - money needed to buy capital
real - actual machinery/tools bought

Question 21

5 characteristics of capital
(think of types of capital)

Answer 21

-capital goods made by people
-machines wear out
-money capital can be changed to any type of capital
-difficult to change real capital
-expensive

Question 22

5 functions of capital

Answer 22

• provides tools to add form utility
• makes mass production possible
• improves the quality of products
• makes standardisation possible
• makes selling on credit possible

Question 23

what is the economic significance of capital

Answer 23

economic growth is a direct result of an increase in the capital assets of a country

Question 24

describe how savings is the starting point of economic growth (4 steps)

Answer 24

1 saving creates capital
2 resulting savings can be channelled to fixed investments
3 financial institutions will have more money available to lend out to businesses
4. results in more jobs opportunities

Question 25

remuneration for capital

Answer 25

interest

Question 26

characteristics of entrepreneurship (4)

Answer 26

• combines all factors of production
• demonstrates initiative
• takes risks
• makes decisions

Question 27

the economic significance of entrepreneurship (6)

Answer 27

• contributes to growth and progress in any economy
  -provides income and employment
• introduces new goods and services
  -increases competition
  -reduces inflation
  -increases tax revue for gov

Question 28

remuneration for entrepreneurship

Answer 28

profit

Question 29

2 types of profit

Answer 29

gross and net

Question 30

gross profit

Answer 30

difference between sales and cost of sales

Question 31

net profit

Answer 31

gross profit plus all other income minus all expenses

Question 32

factors that influence profit (3)

Answer 32

• skills of the entrepreneur
• demand of the product
• production processes and techniques

Question 33

how can community participation in local planning and activities play an essential role in the development of entrepreneurs

Answer 33

community forums, together with local government, can play an important role in the development of entrepreneurs through skills development, financial assistance and making the best use of natural resources

Question 34

how can community participation in local planning and activities help an economy

Answer 34

can help reduce unemployment, alleviate poverty and turn around a low regional growth rate

Question 35

example of community participation which aid entrepreneurs

Answer 35

Small and Medium Business Development Corporation (SMBDC)

Question 36

example of community participation which helps unemployment

Answer 36

Local Economic Development (LED)

Question 37

what are economically marginalised groups

Answer 37

groups are seen as worse off relative to the rest of the population in terms of income, and non-income

They earn less income than the minimum income required to satisfy basic needs

They are largely unemployed, lack basic skills and cannot be trained because they are unable to read or write

Question 38

what is the most common result of marginalisation

Answer 38

material deprivation

Question 39

how have marginalised groups become more empowered (3)

Answer 39

1. since 1994 laws have been put in place to protect the rights of all employees (eg. the law of Black Economic Empowerment and the Employment Equity act)
2. affirmative action plays an important role in empowerment
3. skills development with the help of SETAS (Sector education and training authorities) in primary, secondary and tertiary sector