Factors Of Production

Question 1

What are the 4 factors of production?

Answer 1

The 4 factors of production are Land, Labour, Capital and Enterprise

Question 2

What is Land?

Answer 2

Land is the natural resources that a business uses. For example, oil, gas, trees, water and so on

Question 3

What is Labour?

Answer 3

Labour is the human resource in a business. This refers to the people hired in the business to produce products and manage services. This can involve physical labour like farming, or mental labour like working in an office

Question 4

What is capital?

Answer 4

Capital is the manufactured resource that is used to make goods and services for the future. This includes money invested by the owners and anything bought with the initial investment of the business. For example, machinery and equipment

Question 5

What is Enterprise?

Answer 5

Enterprise is the skills that entrepreneurs use to manage and bring the other FOP’s together. This involves risk-taking and a lot of negotiation

Question 6

What does LAND aim for?

Answer 6

Land seeks rent in return for its contribution to a business

Question 7

What does LABOUR aim for?

Answer 7

Labour seeks wages and salaries in return for its contribution to a business

Question 8

What does CAPITAL aim for?

Answer 8

Capital seeks interest in return for its contribution to a business

Question 9

What does ENTERPRISE aim for?

Answer 9

Enterprise seeks profit from the business after managing the other FOP’s