Economic resources

Question 1

What are the four factors of production?

Answer 1

-Land, Labour, Capital, Enterprise.

Question 2

The factors of production and their benefits?

Answer 2

• Land (Rent)
• Labour (Wages)
• Capital (Interest)
• Enterprise (Profit)

Question 3

What is the Labour factor of production?

Answer 3

• It includes all of the workforce in an economy.
• Every worker is unique with their different skills, qualifications, and experience.

-The value of a worker is called its human capital and can be valued by the income they earn.

• Education and training are likely to increase our human capital.

Question 4

What is the Land factor of production?

Answer 4

• Land encompasses all of the natural resources that come from the Earth that are used in the production of goods or services.
• This includes resources: below the Earth, on the Earth, above the Earth, or in the sea.

Question 5

What is the Capital factor of production?

Answer 5

-Capital has a number of meanings.

-It refers to the man-made aids, such as, machinery, tools, factories and offices.

-Capital goods will bring a stream of income in the future rather than being consumed today.

Question 6

What is the Enterprise factor of production?

Answer 6

• Takes land labour, and capital and organises them in order to produce products that will be profitable.

-The skills of the entrepreneur are crucially important to the health of the UK economy.

-By taking risks the entrepreneur creates wealth and employment in the economy.

-Today’s small businesses are the large businesses of tomorrow.

-Profit is the reward for the entrepreneur.