Factors of Production Flashcards
What does CELL stand for?
Capital
Enterprise
Land
Labour
What is capital?
Man-made machinery and equipment that a business uses to operate and also the money that is available to finance new projects
What are examples of Capital and explain what they would be used for?
Tractor - To help a farmer with farming his crops
Buildings - so a business can have facilities for its employers, employees and customers
What is enterprise?
The business ideas that best combine the other factors of production to make a profit and achieve its aims
What are examples of Enterprise and explain what they are used for?
Tables, fridges, waiters and chefs are all utilised to create a restaurant
What is Land?
The natural resources that the business use i.e. the raw materials
What are examples of Land and explain what they are used for.
Plot of Land - To build a new commercial or retail space
Forest - For timber and wood products
What is Labour?
The workforce or employees of a business
What are examples of Labour and explain what they are used for?
Joiner - Building custom furniture for office space
Farmer - Providing fresh produce or ingredients to a business or organisation
What are taxes?
The percentage of a profit given to the government to fund public sector services e.g. NHS, Schools, Fire brigade.
What is a positive of laws?
It avoids fines and penalties, Improves reputation, attracts new employees and customers, easier to access to grants
What is a negative of laws?
All of this costs money and reduces profit
What are interest rates?
The percentage added to loans when repaid. The percentage added to money when it is saved. (Higher interest rate = save more, borrow less)
What are exchange rates?
The cost of buying a foreign currency (When the exchange raye is low, its better to sell abroad - EXPORT - than to buy in - IMPORT)
