4.1.1.3 Economic resources

Question 1

What are the four Factors of production? (CELL)

Answer 1

Land: Natural resources available for production, such as the sea or oil.
Labour: Human input in terms of quantity and quality.
Capital: Goods made by people used to produce other goods, including machinery, technology, and factories.
Enterprise: Involves organising factors of production and taking risks to exploit market opportunities.

Question 2

What is a capital good?

Answer 2

A capital good are goods that are used to make consumer goods and services i.e. Software ,new factories
This also includes working capital i.e. Stocks of finished products

Question 3

What is automation?

Answer 3

A production technique using technology to replace or enhance human labour. e.g. Robots in Amazon warehouses

Question 4

What is capital-labour substitution?

Answer 4

Replacing labour with capital machinery.

Question 5

What are Non-renewable resources?

Answer 5

Non-renewable resources are finite in supply
i.e. crude oil, coal, natural gas and other fossil fuels where no mechanisms exist at present to replenish them at a rate that is faster than the rate of consumption

Question 6

What are renewable resources?

Answer 6

• Renewables are replaceable if the rate of extraction is less than the natural rate at which a resource
  renews
• Examples of renewable resources are solar energy, tidal power, oxygen, etc..

Question 7

What does non-renewable resources rate of extraction depend on?

Answer 7

The rate of extraction of finite resources depends in part on the current market price