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Economics > Chapter 2: Factors of Production > Flashcards

Chapter 2: Factors of Production Flashcards

1
Q

What are the four factors of production(will be written as FOP in the rest of the questions)?

A

Land, labour, capital, and enterprise

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2
Q

What are the FOP used to produced?

A

Goods and services

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3
Q

What is land?

A

They are gifts of nature available for productions

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4
Q

True or false?
Fish are counted as land

A

True, this is because land includes not only the land itself, but also what is beneath it, what occurs naturally on it, and what is found in them.

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5
Q

What is labour?

A

It is the human effort(both physical and mental effort) used in producing goods and services

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6
Q

What is capital?

A

They are the human-made goods used in production

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7
Q

What is the difference between consumer goods and capital goods?

A

Consumer goods are wanted for the satisfaction they provide to their owners while capital goods are not wanted for their own sake

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8
Q

What is enterprise?

A

It is the willingness and ability to bear uncertain risks and make decisions in a business.

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9
Q

What does it mean when something is occupationally mobile?

A

It means that it is capable of changing use

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10
Q

What does it mean when something is geographically mobile?

A

It means that is is capable of moving from one location to another.

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10
Q

State whether each factor is occupationally mobile

A

Land is occupationally mobile, labour varies, capital varies, enterprise is occupationally mobile

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10
Q

What is the most mobile factor?

A

Enterprise

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10
Q

What can cause geographical immobility for labour?

A

-Differences in the price and availability of housing
-Family ties
-Differences in educational systems
-Lack of information
-Restrictions on the movement of workers

(Exam tip: Never write your answers like this(in bullet points) unless asked to)

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10
Q

State whether each factor is geographically mobile

A

Land is geographically immobile, labour varies, capital varies, enterprise is geographically mobile

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10
Q

What is a renewable resource?

A

Resources that are replaced by nature

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10
Q

True or false?
Renewable resources are replaced by nature however, they can become non-renewable resources if they are over-exploited.

A

True

11
Q

How can we increase the quality of land?

A

Using fertilisers, increasing the purity of rivers, stopping firms from polluting, and providing good drainage

12
Q

What influences the quantity of labour?

A

1.Number of workers
2.Number of hours for which they work

13
Q

What determines the quantity of labour?

A

-The size of the population
-The age structure of the population
-The retirement age
-The school leaving age
-Attitude to working women

14
Q

What is the labour force?

A

They are people who are in work and the people seeking work actively

15
Q

What influences the number of hours people work?

A

-Length of the average working day
-Whether they work full or part-time
-The duration of overtime
-Length of holidays
-Amount of time lost to sickness

16
Q

What is productivity?

A

The output per factor of production in an hour

17
Q

What is labour productivity?

A

The output per worker hour

18
Q

What is an output?

A

The goods and services produced by the FOP

19
Q

What can improve the quality of labour?

A

-Better education
-Better training
-Better healthcare
-More experience

20
Q

What are investments?

A

Spendings on capital goods

21
Q

What are gross investments?

A

Total spending on capital goods

22
Q

What is depreciation?

A

The value of capital goods that have been worn out

23
Q

How do you calculate net investment?

A

Gross investment - Depreciation

24
Q

What can increase the quality of capital?

A

Advances in technology

25
Q

What can increase the quantity of enterprise?

A

-Increase in the number of entrepreneurs
-Good education system
-Lower taxes on firms’ profits
-Reduction in government regulations

26
Q

What can increase the quality of enterprise?

A

-Better education
-Better training
-Better healthcare
-More experience

27
Q

Fill in the blank:
Payments are made to each FOP. Firms pay _____ to its workers(labour), entrepreneurs earn ______, land receives ____, and ________ is the payment for capital.

A

Wages, profit, rent, interest

Economics (7 decks)

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