1.2 (Enterprise, Business & The Economy)

Question 1

What are factors of production?

Answer 1

The inputs needed for creating a good or service

Question 2

Name the 4 factors of production

+ are they active or passive?

Answer 2

Enterprise
Capital (P)
Land (P)
Labour (A)

Question 3

What is enterprise?

+reward

Answer 3

-The process of launching and running a business.
- Management of the other FOP to combine them into a product or service.

+ profits

Question 4

What is land? (e.g?)

+reward

Answer 4

Natural resources available for production (e.g premises and raw materials)

+ rental income to owners of the land

Question 5

How is the use of land maximised?

Answer 5

Using technology

Question 6

What is labour? (+e.g)

+reward

Answer 6

The human input into the production process (managers and employees)

+ wages and salaries from employment

Question 7

What is capital? (+e.g)

+ reward

Answer 7

Goods used in the supply of other products (e.g equipment)
- an investment

+ interest from savings and dividends from shares

Question 8

What are the two types of capital?

Answer 8

Physical = tangible assets
Financial = legal ownership of assets/money

(Financial is used to buy physical)

Question 9

What is human capital?

+what is this represented by?
+ how can this be improved?

Answer 9

The economic value of a worker’s experience and skills

+labour
+ through training and education

Question 10

What is primary production?

Answer 10

Extracting resources from the earth