Chapter 3- Transforming Rescources Into Goods

Question 0

What is land?

Answer 0

These are all the natural resources that can be used for production

Question 1

What are factors of production?

Answer 1

These are resources that are used in the production process and consist of Land, Labour, Capital and Enterprise

Question 2

What is labour?

Answer 2

This is both the physical and mental effort involved in production

Question 3

What is capital?

Answer 3

These are goods that are made in order to produce other goods and services. E.g Factories, Lorries and Machinery

Question 4

What is enterprise?

Answer 4

This is the bringing together of the factors of production in order to create goods and services.

Question 5

Name three types of output and the industry sector they are associated with.

Answer 5

• Natural Resources = Primary Industry
• Manufactured Goods = Secondary In
• Services = Tertiary Industry

Question 6

What does the transformation process mean?

Answer 6

This is the process where by resources are converted into goods or services that satisfy the customers.

Question 7

What is the purpose of a business?

Answer 7

The purpose of a business is to produce goods or services, usually in order to generate profits.

Question 8

How does a business produce goods or services?

Answer 8

A business produces goods by acquiring inputs, converting them into outputs, and to ensure that they reach the customer

Question 9

How are inputs effected by the transformation process?

Answer 9

• Labour & Enterprise are unaffected by the process and can be used repeatedly.
• Capital can be used many times, although it does eventually wear out/ depriciate
• Land, this is used up in the process. So a business may want to recycle or minimise the use of scarce resources

Question 10

What is adding value?

Answer 10

This is the process if increasing the worth of resources by modifying them. The transformation process is a major factor in adding value.

Question 11

Show the equation for Adding Value

Answer 11

Added Value=
Sales Revenue - the cost of bought in
material etc

Question 12

How do you improve factors of production in order to add value?

Answer 12

• By increasing the level of investment in capital equipment
• Training workers
• Using renewable or recyclable resources

Question 13

How can a business add value?

Answer 13

By getting customers to pay higher prices or buy more, this can be done by producing a new line of high quality products that supply the demand.