Factors of Production 8 Flashcards
1
Q
what are the factors of production and what are their rewards
A
natural resources / land - rent
labour - wages
capital - interest
entrepreneurship - profit
2
Q
describe the capital and the types of capital
A
capital is the money used to generate income or invest in a business.
Borrowed capital
any money borrowed by an entrepreneur / business owner for the purpose of establishing and running a business. money often borrowed from bank or investor
Own capital
refers to any money (that comes from personal savings) invested in the business by the entrepreneur / owner. most entrepreneurs begin their business with their own savings, showing that they believe in their business idea / plan. they’re willing to risk their own money in their business venture.
