Factors of Production

Question 1

Factors of production

Answer 1

are economic resources that are used to produce goods and services.

Question 2

The four factors of production

Answer 2

• Land
• Labour
• Capital
• Entrepreneurship

Question 3

Land

Answer 3

refers to all the factor services available naturally above or below the earth.

ACCOUNTS FOR ALL NATURAL RESOUCRES ON THE PLANET THAT CAN BE USED IN THE PRODUCTION PROCESS AND ALSO BUILDINGS SUCH AS FACTORIES WHICH IS MAN MADE

Question 4

Land factor SERVICES

Answer 4

• Land itself
• Land above ground - gases and climate
  conditions
• Seas and rivers
• Resources beneath the earth

Question 5

Factor Payment for land

Answer 5

is RENT

Question 6

Labour

Answer 6

People available for work in the economy.
Labour can be physical (CONSTRUCTION WORKERS) or mental (INTELLECTUAL ECONOMISTS, ENGINEERS, MANAGERS).

Question 7

Mobility of labour

Answer 7

refers to the movement of labour
* occupational mobility
* geographical mobility

Question 8

occupational mobility

Answer 8

refers to the movements of labour from one occupation to another. e.g. a tecaher deciding to become an actor

Question 9

obstacles of occupational mobility

Answer 9

• lack of necessary skills and qualifications- a teacher cannot just become a doctor must be professionally trained
• age factor- older workers r generally less mobile than younger workers
• sentimental reasons- close ties with colleagues and supervisors may suade someone in staying

Question 10

geographical mobility

Answer 10

refers to the movement of labour from one place to another, either locally or to foreign countries

Question 11

obstacles faced from geographical mobility of labour

Answer 11

• financial constraint- cost of moving
• political instability- way or riots in a particular country would discourage people from moving to that country
• national pride- sense of belonging to country, along with the country being where their family and friends are’
• language and culture- difference in language spoken language barrier or vastly differnt culture/cultural norms

Question 12

Division of labour

Answer 12

occurs when a process is broken down into smaller parts.
each worker is specialises in doing just one task.

Question 13

Specialisation

Answer 13

when workers focus on one task and become an expert of it.

each occupation is subdivided into several tasks, each worker is assigned to handle a particular task involved in the production of a good. The division of labour i.e. specialisation increases efficiency in production

Question 14

Advantages of the division of labour

Answer 14

* increase in output- division of labour increas output SCOTTISH ECONOMIST ADAM SMITH

* use of machinery- machinery can be designed to help workers efficiently perform tasks

* increase in productivity- performing reptitive tasks overtime makes workers experts in it. they begin to know all the task of the job very well and can effeciently perform tasks

* employment opportunties- by subdividing occupations, more job opportunities are made for specific skills

Question 15

Disadvantages of specialisation

Answer 15

1. doing repetitive work might be broing and monotonous- repetitive nature of the job workers may find their job boring and unchallenging causing a loss of morale which in turn decreases productivity
2. stifles creativity-due to repetitive nature, wokers may suffer a loss of creativity and boredom
3. causes immobility of labour- since worker become specialists, if they are retrenched, their skills as a worker are specialised to their previous jobs not perhaps are not relevant to the jobs they are looking causing immobility of labour

also** technological advancement**s may cause their jobs to become redundant as machines work more efficiently and replace them

Question 16

how to increase labour productivity

Answer 16

**output per worker per period **GIVE AN EXAMPLE
labour productivity= total output/number of workers

1.** INCREASE THE WAGES OF WORKERS**- incentive to work harder
2. improving working conditions- installing air codnitioners, modern facilities
3. offering promotion opportunities to workers- incentive to work harder

4. providing sufficient education and proper training facilities- upgrade themsekves improves productivity they learn get better

Question 17

Factor Payment for labour

Answer 17

is WAGES

Question 18

Capital

Answer 18

Goods that must beavailable first in order to produce other goods and services in the future.

Question 19

capital formation

Answer 19

refers to the increase in the amount of capital available for production.

to have capital formation, firms must save and engage in investment in order to have enough money to purchase capital (tools and equipment)

Question 20

Factor payment for capital

Answer 20

is INTEREST.

Question 21

Entrepreneurship

Answer 21

Combines the other three factors of production in a profitable manner. The entrepreneur takes and bears all risk.

Question 22

Types of risk

Answer 22

insurable risk such as fire, theft, risks that the insurance company will cover

non-insurable risks- ALSO CALLED UNCERTAINTIES not covered by the insurance company, unpredictable such as change in taste or preference, economic conditions that will cause demand of the good to fall, goods unsold, cannot sustain business

Question 23

Factor payment for Entrepreneurship

Answer 23

is PROFIT.

Question 24

Production

Answer 24

the conversion of factors of production (inputs) into goods and services (output) that consumers wish to consume. or in an effort to satisfy their needs and wants

MANUFACTURING, DISTRIBUTION, PROVIDING
SECTORS THE PRODUCTION PROCESS

Question 25

Productivity

Answer 25

the measure of output per unit of input.

Question 26

Primary Sector

Answer 26

This sector is involved in extracting/harvesting the natural resources from the earth.

agriculture, fishing, forestry, mining, quarrying.

Question 27

Secondary Sector

Answer 27

This sector is involved in taking the output from the primary sector and using it to produce goods and services.

operations of this sector involves the manipulation of raw materials from the primary sector to produce goods and services

Manufacturing and construction, food processing

Question 28

Tertiary Sector

Answer 28

the offering/provision of services.
Involved taking output from the secondary sector and distributing it to consumers.

social work education retail

Question 29

Types of productivity

Answer 29

Labour productivity - Quantity of output/Quantity of labour used

Land productivity - Quantity of output/Quantity of land used

Capital productivity - Quantity of productivity used