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Economics Term 1 Grade 11 > Factors of production > Flashcards

Factors of production Flashcards

1
Q

economic problem

A

satisfying people’s unlimited wants and need with limited resources

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2
Q

4 factors of production

A

natural resources
labour
capital
entrepreneurship

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3
Q

natural resources

A

those resources extracted from nature that humans need to produce goods and services

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4
Q

labour

A

all human effort provided by people to earn remuneration

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5
Q

capital

A

man-made resources used to produce more goods and services

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6
Q

entrepreneurship

A

the person who takes initiative to start the business, organize its production and take risks

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7
Q

why are natural resources scarce

A

there are not enough natural resources in the world of required quality to make all things that people might want

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8
Q

remuneration for natural resources

A

rent

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9
Q

what leads to international trade

A

surplus of resources in one country and the scarcity of resources in another

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10
Q

what are the characteristics of natural resources (4)

A

scarce
have a price
unevenly distributed
mostly not very useful in their natural form

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11
Q

importance of natural resources (2)

A

serve as inputs for production
provide opportunity for int trade

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12
Q

what four industries of natural resources provide economic significance

A

agriculture
forestry
fisheries
mining

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13
Q

3 types of labour

A

skilled
semi-skilled
unskilled

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14
Q

4 characteristics of labour

A

has income as a goal
is part of its owner
not storable
supply cannot suddenly increas

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15
Q

why can labour not be separated from its owner

A

the labour and the person doing the labour are one and the same

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16
Q

why is labour economically significant

A

production cannot take place without physical and mental effort and an economy needs to increase its production in order to grow

17
Q

remuneration for labour

A

salaries and wages

18
Q

difference between nominal and real wages

A

nominal - amounts that the worker receives each week
real - amount of goods and services that a person can buy (buying power of wages)

19
Q

2 types of capital

A

money and real

20
Q

difference between money and real capital

A

money - money needed to buy capital
real - actual machinery/tools bought

21
Q

5 characteristics of capital
(think of types of capital)

A

-capital goods made by people
-machines wear out
-money capital can be changed to any type of capital
-difficult to change real capital
-expensive

22
Q

5 functions of capital

A
  • provides tools to add form utility
  • makes mass production possible
  • improves the quality of products
  • makes standardisation possible
  • makes selling on credit possible
23
Q

what is the economic significance of capital

A

economic growth is a direct result of an increase in the capital assets of a country

24
Q

describe how savings is the starting point of economic growth (4 steps)

A

1 saving creates capital
2 resulting savings can be channelled to fixed investments
3 financial institutions will have more money available to lend out to businesses
4. results in more jobs opportunities

25
Q

remuneration for capital

A

interest

26
Q

characteristics of entrepreneurship (4)

A
  • combines all factors of production
  • demonstrates initiative
  • takes risks
  • makes decisions
27
Q

the economic significance of entrepreneurship (6)

A
  • contributes to growth and progress in any economy
    -provides income and employment
  • introduces new goods and services
    -increases competition
    -reduces inflation
    -increases tax revue for gov
28
Q

remuneration for entrepreneurship

A

profit

29
Q

2 types of profit

A

gross and net

30
Q

gross profit

A

difference between sales and cost of sales

31
Q

net profit

A

gross profit plus all other income minus all expenses

32
Q

factors that influence profit (3)

A
  • skills of the entrepreneur
  • demand of the product
  • production processes and techniques
33
Q

how can community participation in local planning and activities play an essential role in the development of entrepreneurs

A

community forums, together with local government, can play an important role in the development of entrepreneurs through skills development, financial assistance and making the best use of natural resources

34
Q

how can community participation in local planning and activities help an economy

A

can help reduce unemployment, alleviate poverty and turn around a low regional growth rate

35
Q

example of community participation which aid entrepreneurs

A

Small and Medium Business Development Corporation (SMBDC)

36
Q

example of community participation which helps unemployment

A

Local Economic Development (LED)

37
Q

what are economically marginalised groups

A

groups are seen as worse off relative to the rest of the population in terms of income, and non-income

They earn less income than the minimum income required to satisfy basic needs

They are largely unemployed, lack basic skills and cannot be trained because they are unable to read or write

38
Q

what is the most common result of marginalisation

A

material deprivation

39
Q

how have marginalised groups become more empowered (3)

A
  1. since 1994 laws have been put in place to protect the rights of all employees (eg. the law of Black Economic Empowerment and the Employment Equity act)
  2. affirmative action plays an important role in empowerment
  3. skills development with the help of SETAS (Sector education and training authorities) in primary, secondary and tertiary sector

Economics Term 1 Grade 11 (6 decks)

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