factors of production

Question 1

what are the four factors of production and their remunerations?

Answer 1

natural resources/ land/ raw materials – rent
capital – interest
labour – salaries and wages
entrepreneurship – profit

Question 2

what are the types of natural resources?

Answer 2

1) on the surface [ agriculture and forestry and water ]
2) below the surface [ minerals and rocks ]
3) above the surface [ rain and climate, energy ]

Question 3

what are some of the natural resources that are available to SA?

Answer 3

• agriculture
• forests
• fresh water
• sea
• minerals
• the Sun

Question 4

what are the characteristics of natural resources?

Answer 4

1) divided into two categories:
– those that are exploitable by humans
– those that are renewable
2) processed for consumption
3) unevenly distributed

Question 5

how can we use natural resources in a sustainable way?

Answer 5

• limited by nature
• efficient production
  – do not overgraze
  – permits and quotas
  – limited by fresh water
  – generation of coal
• job creation

Question 6

what are the types of labour?

Answer 6

1) skilled labour
2) semi-skilled labour
3) unskilled labour

Question 7

when is someone a skilled labourer?

Answer 7

when they’ve received specialised training.

Question 8

when is someone a semi skilled labourer?

Answer 8

when they did not receive specialised training and skills but are more complex than unskilled labour.

Question 9

when is someone an unskilled labourer?

Answer 9

when the did not receive any specialised training at all.

Question 10

what are the characteristics of labour?

Answer 10

• active population in SA ranges from 15 to 65
• involves the mental or physical effort of a person
• is inseparable from the person
• is perishable

Question 11

what are some ways in which labour can be sustainably used?

Answer 11

businesses pay 1% of their payroll towards the Skills Development Fund as a tax.

Question 12

what are the types of capital?

Answer 12

1) monetary capital
– own or borrowed money
2) physical capital
– machines, equipment, tools

Question 13

what are the characteristics of capital goods?

Answer 13

• are used over a period of time
• used to manufacture products or services
• have to be maintained and replaced due to wear and tear
• new technology makes older machines to become outdated
• infrastructure is known as public capital
• capital formation takes place when people save

Question 14

how can we can use capital in a sustainable way?

Answer 14

when capital is invented in a business, it has the potential to create jobs, which in turn provides an income for people. money that is saved in banks becomes available to businesses to borrow to expand and create more jobs

Question 15

what are the types of entrepreneurs?

Answer 15

1) survivalist
2) lifestyle entrepreneur
3) social-preneur
4) tenderpreneur
5) serial entrepreneur
6) traditional entrepreneur

Question 16

explain what makes an entrepreneur a survivalist?

Answer 16

the reason that they started their business is to make a living to survive. this is a direct result of the high unemployment rates in SA.

Question 17

explain what makes someone a lifestyle entrepreneur?

Answer 17

when someone takes up a hobby (or a way of life) and starts a business based on the hobby.

Question 18

explain what makes someone a social-preneur?

Answer 18

when someone starts a business based on a societal need which the government is not able to meet.

Question 19

explain what makes someone a tenderpreneur?

Answer 19

when previously disadvantaged people have seen an opportunity in the fact that the Government now allocates tenders to this group of people.

Question 20

explain what makes someone a serial entrepreneur?

Answer 20

when someone starts a business and as soon as it becomes successful, they become bored and sell the business in order to start a new business.

Question 21

explain what makes someone a traditional entrepreneur?

Answer 21

an entrepreneur who starts a business with the aim of growing it as much as possible.

Question 22

define an entrepreneur.

Answer 22

individuals who identify a gap in the market and who then create a product or service that satisfies the wants/ needs of the consumer. in doing so, they bear the risks required to transform the other three factors of production into something that will be valued by the consumers.

Question 23

what are the characteristics of an entrepreneur.

Answer 23

• organised
• professional
• risk taker
• innovative
• decision making
• negotiation skills

Question 24

what are ways in entrepreneurship can be sustainably used?

Answer 24

• deliver a product of service that will satisfy the unmet need.
• job creation
• growth of the economy

Question 25

what does it mean to identify entrepreneurial opportunities?

Answer 25

to identify a gap in the market and to:
1) create a new product or service
2) adapt a current product or service

Question 26

how can we form the foundation of a business?

Answer 26

1) observe trends
2) solve a problem
3) find a gap in the market

Question 27

what must the entrepreneur pay close attention to when we talk about them observing a trend?

Answer 27

• changes in legislation
• social trends
• economic issues
• political changes
• technological advancements

Question 28

what does it mean when an entrepreneur is solving a problem?

Answer 28

the entrepreneur may identify a specific problem but some entrepreneurs observe challenges and create a product or service to solve that problem as entrepreneurs do not a see a problem but see an opportunity to make money.

Question 29

what does ‘finding a gap in the market’ mean?

Answer 29

to recognise a customer need that is not being met.

Question 30

define a niche market

Answer 30

a relatively small group of customers with the same interest.