Factors of production

Question 1

What are factors of production

Answer 1

Factors of production are resources used in production of goods and services

Question 2

What are the four categories of production

Answer 2

1) Capital
2) Enterprise
3) Land
4) Labor

Question 3

Explain land

Answer 3

This refers to all natural resources used in the production process

Question 4

Explain capital

Answer 4

This refers to all the manmade (manufactured) things used in the production process

Question 5

Explain labour

Answer 5

This refers to as all human resources used in the production process including skilled and unskilled labor

Question 6

Explain enterprise

Answer 6

This refers to as the skill used to manage and organise all other resources inn the production process

Question 7

What are factor rewards

Answer 7

The payments that different factors of production require and receive in order to participate in a productive activity

Question 8

What is the reward for land

Answer 8

Rent

Question 9

What is the reward for capital

Answer 9

Interest

Question 10

What is the reward for labor

Answer 10

Wages

Question 11

What is the reward for enterprise

Answer 11

Profit

Question 12

What are all the factor rewards jointly called

Answer 12

Income

Question 13

Explain rent

Answer 13

Owners of the land require the payment of rent to supply there resources to firms

Question 14

Explain wages

Answer 14

People will supply their labor to firms in return for payments called wages

Question 15

Explain interest

Answer 15

Interest is paid to people and organizations that supply or invest in capital in firms

Question 16

Explain profit

Answer 16

To organize production in a firm an entrepreneur must pay our rents, wages and interest to the suppliers of the factors of production it needs

Question 17

What is profit

Answer 17

It is the surplus leftover after all of its costs has been paid

Question 18

What is factor mobility

Answer 18

This refers to the extent to which resources can be changed for one another in the production process

Question 19

What are the two types of factor mobility

Answer 19

1) Geographical mobility
2) Occupational mobility

Question 20

What is geographical mobility

Answer 20

It is how easy it is for a resource to move between different locations to perform a task.

Question 21

What is occupational mobility

Answer 21

It is the ability of a resource to multitask

Question 22

Explain mobility of land

Answer 22

Mostly geographically immobile
Mostly occupationally mobile

Question 23

Why is most land geographically immobile

Answer 23

Because it is difficult to relocate them

Question 24

Why is most land occupationally mobile

Answer 24

Because it can be used for a number or purposes

Question 25

How is the mobility of labor

Answer 25

Labor is both geographically and occupationally mobile

Question 26

What are some causes of geographical immobility in labor

Answer 26

1) Prices and availability of housing
2) Education Systems
4) Restrictions on the movement of labor

Question 27

What are the three types of labor

Answer 27

1) Skilled
2) Unskilled
3) Semi-skilled

Question 28

What are renewable natural resources

Answer 28

Can be used again and again

Question 29

What are non-renewable resources

Answer 29

Reduced by use

Question 30

Explain the mobility of capital

Answer 30

1) Geographically mobile
2) Occupationally immobile

Question 31

What has the most mobile factor of production

Answer 31

Enterprise

Question 32

Explain the mobility of enterprise

Answer 32

Both geographically and occupationally mobile

Question 33

What results in the changes of quality and quantity in factors of production

Answer 33

1) Increase or decrease in cost of factors of production
2) New technologies
3) Improvements in education and healthcare
4) Net migration of labor