Economic Resources Flashcards
1
Q
Factors of Production earn reward for use in the form of:
A
- Rent = Land
- Wages = Labour
- Interest = Capital
- Profit = Enterprise
2
Q
Four factors of Production
A
- Land
- Labour
- Capital
- Enterprise
3
Q
Labour as a Factor of Production
A
- Labour includes all of the workforce in an economy.
- Value of a worker is called Human Capital.
- Education and training increase human capital.
3
Q
Land as a Factor of Production
A
- Land encompasses all of the natural resources that come from the earth that are used in the production of goods or services.
4
Q
Capital as a Factor of Production
A
- Capital as a Factor of Production refers to man-made aids that are used in the production process.
- Capital goods will bring a stream of income in the future rather than being consumed today.
5
Q
Enterprise as a Factor of Production
A
- The Entrepreneur takes Land, Labour and Capital and organises them in order to produce profitable products.
6
Q
Opportunity Cost Definition
A
The benefit lost of the next best alternative when making a choice.
