Economic resources

Question 1

What are the four factors of production?

Answer 1

-Land

-Labour

-Capital

-Enterprise

-These are the resources used by firms to produce goods and services.

Question 1

What are the rewards given if the four factors of production are met?

Answer 1

-Rent

-Wages

-Interest

-Profit

Question 2

What is the Labour factor in production?

Answer 2

• Includes all of the workforce in the economy.

-The value of a worker is called human capital.

-Every worker is unique and therefore a worked is valued by the income that they earn.

Question 3

What is the Land factor in production?

Answer 3

• It encompasses the natural resources that come from the Earth which are used in producing goods and services.

Question 4

What is the Capital factor in production?

Answer 4

• It refers to the man-made aids that are used in the production process, like machinery, tools, factories, and offices.

-Capital goods ensure a stream of income in the future.

Question 5

What is the Enterprise factor in production?

Answer 5

-The entrepreneur uses the first 3 factors to produce profitable products.

-The skills of the entrepreneur are vital for the health of the UK economy.

-It is considered that today’s small businesses are the large businesses of tomorrow, and that profit is the reward for the entrepreneur.