Factors Of Production Flashcards
What is capital?
Goods used to produce more goods
Is money classified as capital?
No, capital refers to man-made goods used in production
Can a truck be classified as capital?
Yes, if used to produce goods
What is labour?
The human factor in the production process
What are the characteristics of labour?
- Human factor
- Only the worker can sell their services
- Cannot be stored
- More mobile than land
- Not homogeneous
What is geographical mobility?
Ease of movement from one place to another
What is occupational mobility?
Ease of changing the use or occupation of a factor of production
Is land geographically mobile?
No, land is geographically immobile
Does land have a cost of production?
No, land itself has no cost of production
Is land in fixed supply?
Yes, the amount of land on Earth is fixed
What is the definition of land in the context of factors of production?
All naturally occurring free gifts of nature
What are the different types of land?
- Land on earth’s surface
- Land above ground
- Seas and rivers
- Resources beneath the earth
What is the definition of entrepreneurship?
The risks involved in organizing the other factors of production
What is investment in economic terms?
The purchase of capital goods
What is working capital?
Raw materials and intermediate goods used in production
What is fixed capital?
Factories and machinery used in production
What is social capital?
Infrastructure provided by the government
What is human capital?
People’s abilities, knowledge, and skills
What is capital accumulation?
Increase in the capital stock of a country
What are the two main functions of an entrepreneur?
- Combine factors of production
- Bear the risk of production
What is the labour force?
The number of people willing to work in the economy
What are the four factors of production?
- Land
- Labour
- Capital
- Entrepreneurship
The supply of labour is dependent on which factors?
- Size of the population
- Proportion willing to work
- Number of hours worked
Fill in the blank: Labour represents ______ in the production process.
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