Factors of Production Flashcards
Factors of production
are economic resources that are used to produce goods and services.
The four factors of production
- Land
- Labour
- Capital
- Entrepreneurship
Land
refers to all the factor services available naturally above or below the earth.
ACCOUNTS FOR ALL NATURAL RESOUCRES ON THE PLANET THAT CAN BE USED IN THE PRODUCTION PROCESS AND ALSO BUILDINGS SUCH AS FACTORIES WHICH IS MAN MADE
Land factor SERVICES
- Land itself
- Land above ground - gases and climate
conditions - Seas and rivers
- Resources beneath the earth
Factor Payment for land
is RENT
Labour
People available for work in the economy.
Labour can be physical (CONSTRUCTION WORKERS) or mental (INTELLECTUAL ECONOMISTS, ENGINEERS, MANAGERS).
Mobility of labour
refers to the movement of labour
* occupational mobility
* geographical mobility
occupational mobility
refers to the movements of labour from one occupation to another. e.g. a tecaher deciding to become an actor
obstacles of occupational mobility
- lack of necessary skills and qualifications- a teacher cannot just become a doctor must be professionally trained
- age factor- older workers r generally less mobile than younger workers
- sentimental reasons- close ties with colleagues and supervisors may suade someone in staying
geographical mobility
refers to the movement of labour from one place to another, either locally or to foreign countries
obstacles faced from geographical mobility of labour
- financial constraint- cost of moving
- political instability- way or riots in a particular country would discourage people from moving to that country
- national pride- sense of belonging to country, along with the country being where their family and friends are’
- language and culture- difference in language spoken language barrier or vastly differnt culture/cultural norms
Division of labour
occurs when a process is broken down into smaller parts.
each worker is specialises in doing just one task.
Specialisation
when workers focus on one task and become an expert of it.
each occupation is subdivided into several tasks, each worker is assigned to handle a particular task involved in the production of a good. The division of labour i.e. specialisation increases efficiency in production
Advantages of the division of labour
* increase in output- division of labour increas output SCOTTISH ECONOMIST ADAM SMITH
* use of machinery- machinery can be designed to help workers efficiently perform tasks
* increase in productivity- performing reptitive tasks overtime makes workers experts in it. they begin to know all the task of the job very well and can effeciently perform tasks
* employment opportunties- by subdividing occupations, more job opportunities are made for specific skills
Disadvantages of specialisation
1. doing repetitive work might be broing and monotonous- repetitive nature of the job workers may find their job boring and unchallenging causing a loss of morale which in turn decreases productivity
2. stifles creativity-due to repetitive nature, wokers may suffer a loss of creativity and boredom
3. causes immobility of labour- since worker become specialists, if they are retrenched, their skills as a worker are specialised to their previous jobs not perhaps are not relevant to the jobs they are looking causing immobility of labour
also** technological advancement**s may cause their jobs to become redundant as machines work more efficiently and replace them
