Factors of Production

Question 1

What is Land and its reward?

Answer 1

Land is any natural resource, and is rewarded in rent.

Question 2

How does land affect production?

Answer 2

The quality of it, for example quality of soil for crops or sand and sun for tourism (weather).

Question 3

What is Labour and its reward?

Answer 3

Labour is the Human Resources used and is rewarded in wages.

Question 4

How does Labour affect production?

Answer 4

Better quality labour, better products.

Question 5

What affects labour supply?

Answer 5

• discrimination of women
• retirement age
• population

Question 6

What is Capital and its reward?

Answer 6

Capital is physical goods used by humans to aid in production. It is combinable with land and labour and is rewarded with interest or lease costs.

Question 7

What is enterprise (traits)?

Answer 7

Enterprise is a kind of human capital and differs from the rest of the FOP, as it organises them into profit-creating works.

Question 8

Human Capital vs. Physical Capital?

Answer 8

Human capital:
1. Labour

Physical Capital:
1. CREATED by labout

Question 9

What is the division of labour?

Answer 9

It is when tasks to create a product are split into individual tasks which allow for specialisation.

Question 10

Advs of Division of Labour?

Answer 10

1. Faster Production
2. Increased Efficiency
3. ‘Cheaper’ Labour (productivity output increases so you pay less per piece)
4. Increases supply ability

Question 11

Disadvs of division of labour?

Answer 11

1. Gets repetitive
2. People make mistakes
3. If a production line, one fucks up everyone fucks up.

Question 12

What is the entrepreneur’s role?

Answer 12

They make decisions and bear risk from their usage of the fops.