Chapter 3- Transforming Resources into Goods And Services Flashcards

0
Q

What are the factors of production?

A

Land, labour, capital and enterprise.

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1
Q

What are “resources” (or inputs)?

A

The elements that go into producing goods and services.

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2
Q

How to improve efficiency of the factors of production?

A
  • improving fertility of land: greater output per acre. And livestock farming.
  • using renewable or recyclable resources
  • greater education and training of the workforce: labour
  • increasing the level of investment in capital equipment:enhance efficiency of labour force.
  • improvements in entrepreneurial skills
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3
Q

What is meant by the term “production”?

A

The process whereby resources (factors of production) are converted into a form that is intended to satisfy requirements of potential customers.

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4
Q

What is meant by the term “output”?

A

The finished products

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5
Q

What must a firm ensure when going through the ‘transformation process’?

A

They must be careful to not overuse the resources as this may lead to lower levels of efficiency in the future.

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6
Q

What is meant by the term “Primary Sector”?

A

Those organisations involved in extracting raw materials (e.g: farming, fishing, forestry and extracting industries…).- natural resources
It can be expensive to go through.

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7
Q

What is meant by the term “Secondary (manufacturing) Sector”?

A

Those organisations involved in processing or refining the raw materials from the primary sector into finished or semi-finished products (e.g: textiles manufacturers, food processors)
They may act as inputs for other businesses who produce more complex end product.

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8
Q

What is meant by the term “Tertiary Sector”?

A

Those organisations involved in providing services to customers and to other businesses, in either public or private sector. (E.g: health, education)

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9
Q

What is meant by the term “Feedback”?

A

It is the final of the transformation process.

Feedback of information is used to adjust the process in the future.

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10
Q

What does “GDP” mean?

A

GDP means Gross Domestic Product.

It is the total value of a country’s over the course of a year.

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11
Q

What is meant by the term “Value Added (added value)”?

A

Sales revenue minus the cost of bought-in materials, component and services.

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12
Q

What is meant by the term “Adding Value”?

A

The process of increasing the worth of resources by modifying them.

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13
Q

What is meant by “USP”?

A

Unique selling point/proposition.

A feature of a product or service that allows it to be differentiated from other products.

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14
Q

What can a firm do to add value?

A
  • bringing product within easier reach for customers by retailing and distribution
  • creating a USP
  • identifying an attractive mix of design, function, image and service
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