Factors of Production Flashcards
(20 cards)
What are the four factors of production?
Natural Resources, Labour, Entrepreneurship, Capital
What are the Characteristics of Natural Resources?
- Supply is fixed
- Natural resources are gifts from nature
- Resources have to be developed
- Resources may be depleted or destroyed
What is the Remuneration of Natural Resources?
Rent
What is the importance of Natural Resources?
- Production of goods and services
- Determines quality of the enviroment
- Impacts on the economic development of a country
- Created job, export and ownership opportunities
What is the definition of Labour?
Labour is any human effort that is mental or physical that is put into the production of goods and services with the aim of receiving a reward
What is the remuneration of Labour?
Wages and Salaries
What is the importance of Labour?
- Largest contributor to national income
- Quantity of labour
What are the characteristics of Labour?
- Physically present
- Cannot be stored
- Heterogeneous (Quality differs)
- Bargaining process
What influences the growth/supply/quantity of Labour?
- Population growth
- Labour force participation rate
- Migration
What is the definition of Capital?
Capital comprises all manufactured resources such as machinery, tools or buildings
What is the remuneration of Capital?
Interest
What are the characteristics of Capital?
- Owned
- Capital must be created
- Supply is not fixed
- Capital increases production
What is the importance of Capital?
Economic Growth
What is the remuneration of Entrprenuership?
Profit
What are the things that influence Entrepreneurship?
Economic conditions, demand, price
What are the characteristics of Entrepreneurship?
- Take initiative
- Combine factors of production
- Bear the risk of buying and selling at certain prices
- Create new enterprises and open new markets
What is the importance of Entrepreneurship?
- Ensures competition
- Creates jobs
- Increases efficiency
- Creates new wealth
- Increase economic growth
What is the definition of an Entrepreneurship?
It is someone who organizes and assumes the risk of a business in return for profit
What are Marginalized groups?
People who do not fully participate in the economy
What are the factors that create Marginalized groups?
- Discrimination
- Poor education
- Disabilities
- Refugees
