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Flashcards in Factors of Production 8 Deck (2)
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1
Q

what are the factors of production and what are their rewards

A

natural resources / land - rent
labour - wages
capital - interest
entrepreneurship - profit

2
Q

describe the capital and the types of capital

A

capital is the money used to generate income or invest in a business.

Borrowed capital

any money borrowed by an entrepreneur / business owner for the purpose of establishing and running a business. money often borrowed from bank or investor

Own capital

refers to any money (that comes from personal savings) invested in the business by the entrepreneur / owner. most entrepreneurs begin their business with their own savings, showing that they believe in their business idea / plan. they’re willing to risk their own money in their business venture.