Economic basics Topic 2 - Production

Question 1

What are Factors of Production

Answer 1

The resources used to produce goods and services. They include land, labour, capital and enterprise

Question 2

Land

Answer 2

Land is the natural resources on the planet. It includes the physical land, natural resources such as coal, oil, rainwater, forests, rivers and fertile soil

Question 3

Labour

Answer 3

this is the workforce in the economy who are used in production

Question 4

Labour intensive

Answer 4

Where production relies more heavily on labour relative to machinery

Question 5

Capital

Answer 5

Manmade physical goods used to produce other goods and services

Question 6

Working capital

Answer 6

Resources used up in production such as raw materials and components

Question 7

Fixed capital

Answer 7

the stock of ‘manmade’ resources such as machines and tools used to help make goods and services

Question 8

Human capital

Answer 8

The value of the workforce or an individual worker

Question 9

Capital intensive

Answer 9

Where production relies more heavily on machinery relative to labour

Question 10

Investment

Answer 10

Spending by firms on capital

Question 11

Entrepeneur

Answer 11

An individual who organises the other factors of production and risks their own money in a business venture

Question 12

Productivity

Answer 12

The amount of output that can be produced with a given quantity of resources

Question 13

Production

Answer 13

A process which involves converting resources into goods and services

Question 14

Primary sector

Answer 14

The industry sector which involves the extraction of raw materials from the earth

Question 15

Secondary sector

Answer 15

the sector of the industry which involves the conversion of raw materials into finished and semi-finished goods

Question 16

Tertiary sector

Answer 16

The sector of the industry with involves the production of services in the economy

Question 17

Industrialisation

Answer 17

The expansion of the manufacturing sector within a predominantly agricultural economy

Question 18

De-industrialisation

Answer 18

the decline in manufacturing

Question 19

Developed country

Answer 19

associated with a significant decrease in importance of primary sector industries, de-industrialisation and a growing tertiary sector.

Question 20

Developing countries

Answer 20

associated with a decrease in importance of the primary sector and an increasing importance in the secondary and tertiary sectors.

Question 21

What are the trends between labour intensive and capital intensive work?

Answer 21

Capital intensive work tends to produce more and is cheaper than labour intensive work