1b, c) Positive + Normative statements, Factors of Production

Question 1

What is a positive statement/factual judgement?

Answer 1

factual information backed up by evidence.

Question 2

What is a normative statement/value judgement?

Answer 2

subjective statements based on opinion.

Question 3

Land definition, reward?

Answer 3

natural resources used in the production of goods and services. Rent.

Question 4

Labour definition, reward?

Answer 4

human capital deriving from mental and physical effort. Wage/Salary.

Question 5

Capital definition, reward?

Answer 5

man-made resources used for the production of other goods and services. Interest.

Question 6

Enterprise definition, reward?

Answer 6

the ability to take risk and combine all other factors of production. Profit.

Question 7

Specialisation definition

Answer 7

Concentration of production of goods and services because of comparative advantage at any level.

Question 8

Division of labour definition

Answer 8

when a manufacturing process is split into a sequence of individual tasks to allow workers to specialize.