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Factors Of Production And Specialisation Flashcards

1
Q

What are the Factors of Production?

A

Production of any commodity is the result of co-operation between different factors or agents of production. The four factors are land, labour, capital, and organisation or enterprise.

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2
Q

What does ‘land’ refer to in the context of Factors of Production?

A

Land refers to all natural resources, including forests, lakes, seas, mountains, climate, weather, and air.

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3
Q

What is included in the term ‘labour’?

A

Labour includes all types of workers, both those who work with their brains and those who work with their hands, including technical, non-technical, managerial, and clerical workers.

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4
Q

What is the definition of ‘capital’?

A

Capital refers to all man-made appliances and types of wealth used in production, such as machinery, tools, buildings, materials, and fuels.

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5
Q

What distinguishes land from capital?

A

Land refers to natural resources or gifts of nature, while capital refers to man-made productive assets.

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6
Q

What does ‘organisation or enterprise’ refer to?

A

Organisation or enterprise refers to the services of the organiser or entrepreneur who brings together all factors, manages the business, and takes risks.

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7
Q

How is an entrepreneur different from other factors of production?

A

The entrepreneur is not employed by anyone and does not receive a fixed salary, unlike other factors which are paid fixed and contractual payments.

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8
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9
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10
Q

What is land as a factor of production?

A

Land refers to all natural resources such as land, water, air, and light that yield income and have exchange value.

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11
Q

What is capital in the context of production?

A

Capital is defined as that part of wealth used in further production, consisting of tools, machinery, buildings, materials, and fuel.

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12
Q

How do modern economists view the relationship between land and capital?

A

Modern economists emphasize the similarities between land and capital, contrasting earlier views that focused on their differences.

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13
Q

What distinguishes land from capital?

A

Land is a gift of nature, while capital is man-made. Land has original and indestructible properties, whereas capital’s properties are created by humans.

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14
Q

Can the quantity of land be increased?

A

Land is fixed and limited in quantity; it cannot be increased or decreased.

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15
Q

Is the supply of capital fixed?

A

The supply of capital is not fixed; it can be increased or decreased.

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16
Q

Can individual land ownership vary?

A

While the total supply of land is fixed, an individual can acquire as much land as they have the means for.

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17
Q

How can the productivity of land be increased?

A

Productivity of land can be increased through intensive cultivation, which can be seen as similar to increasing land space.

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18
Q
A
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19
Q

What is the difference in quantity between land and capital?

A

Land is fixed in quantity in the absolute sense, while capital can be fixed only in a relative sense.

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20
Q

How is land described in terms of permanence and perishability?

A

Land is said to be permanent, while capital is perishable. Even if land loses its fertility, it can be restored.

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21
Q

What is a key difference in mobility between land and capital?

A

Land lacks mobility as it cannot be transferred from one place to another, while capital is mobile and can be transferred anywhere.

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22
Q

In what two senses can land be considered mobile?

A

Land can be transferred from one person to another, and the products of land can be transferred from one place to another.

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23
Q

How does the income from land compare to the income from capital?

A

Income from land varies due to its infinite variations in fertility and situation, while income from capital is uniform.

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24
Q

What conclusion do older writers draw about land and capital?

A

Older writers emphasize the differences between land and capital, concluding that land is a distinct factor of production.

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25
What conclusion do modern writers draw about land and capital?
Modern writers emphasize the similarities, concluding that land is not a distinct factor of production but a type of capital.
26
How is labour defined in economics?
Labour in economics includes all types of labour used in production, encompassing skilled and unskilled, manual and mental, and various sectors.
27
What types of labour are included in the definition of labour?
Labour includes skilled and unskilled labour, manual and mental labour, and those employed in education, arts, science, government, and administration.
28
29
What is the distinction between productive and unproductive labour?
Productive labour produces a material commodity or tangible wealth, while unproductive labour does not. ## Footnote Adam Smith believed that the labour of kings and judges was unproductive, while physiocrats considered only agriculturists as productive.
30
How is modern perception of labour different from that of older writers?
Modern writers consider all types of labour as productive if they are paid for, regardless of success or direction. ## Footnote Older writers viewed misdirected or wasted labour as unproductive.
31
What types of labour are generally regarded as unproductive?
Labour involved in unsocial activities, such as gambling, theft, and monopolistic speculation, is generally regarded as unproductive. ## Footnote These activities may generate income but do not produce tangible goods or services.
32
What is a unique characteristic of labour compared to other factors of production?
Labour is distinct in that the worker embodies the service they perform, unlike other suppliers of factors who are separate from what they supply. ## Footnote For example, a capitalist is different from the capital they provide.
33
How is the service of the worker treated in the market?
The service of the worker is bought and sold, but the worker themselves remains their own property. ## Footnote This means that while the worker sells their work, they do not sell themselves.
34
What influences the type of work a person does?
Personal likes and dislikes are major determinants in the type of work a person chooses to undertake.
35
36
What is the nature of labour service?
Labour service is perishable and does not last. If a worker does not find work on a particular day, his labour is wasted for that day.
37
Why are workers economically weak?
Workers are economically weak compared to their employers, leading to weak bargaining power. Employers may pressure workers to accept lower wages.
38
How do workers improve their bargaining power?
Workers may organize into trade unions to raise their bargaining power and improve their economic conditions.
39
What is a unique characteristic of labour?
Labour cannot be separated from the labour service; a worker must present himself personally to deliver his service.
40
How does the personal nature of labour affect its quality?
The conditions and surroundings under which the worker works significantly impact the quality of work contributed by the worker.
41
What factors influence labour beyond wages?
Factors include the number of hours worked, job security, working conditions, pensions, and vacations.
42
How does wage change affect the supply of labour?
Unlike other commodities, if wages rise, the supply of labour may contract, and if wages fall, the supply may increase.
43
Why might workers reduce their supply of labour when wages rise?
Workers may enjoy more leisure and persuade family members to give up their jobs, leading to a contraction in the supply of labour.
44
What happens to labour supply when wages fall below the standard of living?
Workers tend to work harder and increase their hours, and non-working family members may also take up jobs to maintain the minimum standard of living.
45
46
How do changes in wages affect the supply of labour?
Changes in the price of labour (i.e., wages) will react curiously on the supply of labour.
47
What is the relationship between population and labour supply?
Labour supply depends upon population and is not strictly dependent on economic factors.
48
What are the peculiarities of labour as a factor of production?
Labour exhibits certain special peculiarities that differentiate it from other factors of production.
49
How is the determination of wages explained?
Wage determination is explained in terms of economic considerations of productivity and social considerations like 'fair wages' and 'family wages'.
50
How do economists view labour compared to other factors of production?
To economists, labour is like any other factor, and its peculiarities are considered irrelevant for wage determination.
51
What does efficiency of labour mean?
Efficiency of labour refers to the quantity of goods a worker can produce during a given period of time.
52
Why is a standard unit of efficiency important?
A standard unit of efficiency allows for the comparison of the efficiency of different workers or groups of workers.
53
What term did Joan Robinson use to refer to the concept of standard efficiency unit?
Joan Robinson referred to it as the 'corrected natural unit'.
54
Why is efficient labour considered a national asset?
Efficient labour leads to increased productivity, lower production costs, and higher competitive strength.
55
What factors influence the efficiency of labour?
The efficiency of labour depends on various factors, some of which are general while others are specific to the workers.
56
57
What are the general conditions affecting labor efficiency?
General conditions include natural and climatic conditions and racial characteristics of the people. Natural and climatic conditions greatly influence labor efficiency.
58
How do climatic conditions affect labor efficiency?
People living in tropics may struggle with sustained physical labor due to heat, while those in temperate and cold climates can perform more physical work without exhaustion.
59
What is the impact of racial characteristics on labor efficiency?
Racial qualities can influence physical strength and endurance, affecting the ability to undertake physical work.
60
What social factors can affect labor efficiency?
Social insurance schemes that protect workers against sickness, accidents, unemployment, and old age can raise productivity by alleviating fears of want.
61
What personal qualities affect a worker's efficiency?
Personal qualities such as mental alertness, intelligence, resourcefulness, initiative, and willingness to learn are crucial for a worker's efficiency.
62
How does education influence labor efficiency?
Education, both general and technical, enhances a worker's efficiency by imparting knowledge and strengthening instincts and character.
63
What is the role of management in labor efficiency?
The efficiency of workers is influenced by the quality of management and the cooperating factors in the workplace.
64
65
What factors influence the productivity of labor?
The productivity of labor rises when workers are given the use of machinery and when the work environment is conducive to efficiency.
66
How does the work environment affect labor efficiency?
In an overcrowded factory with inadequate amenities, workers cannot perform at their best. A cheerful and bright environment increases labor efficiency.
67
What role do wages play in labor efficiency?
Higher wages positively affect efficiency by enabling workers to afford adequate food, clothing, and housing, leading to contentment and dedication to their jobs.
68
What is the impact of bonuses and profit-sharing on worker efficiency?
Bonuses and profit-sharing have a favorable effect on the efficiency of workers.
69
How do working hours affect labor efficiency?
Long working hours without suitable rest do not necessarily lead to higher profits; adequate rest and relaxation are essential for maintaining efficiency.
70
What are some factors affecting the efficiency of Indian workers compared to others?
Factors include the type of machinery used, materials, industrial organization, working conditions, wage levels, and housing conditions.
71
What is a notable comparison of spindle management among workers in different countries?
An Indian worker manages 180 spindles, while a Japanese operator manages 240, a British operator over 600, and an American operator nearly 1,120 spindles.
72
How many looms does an Indian weaver attend to compared to others?
An Indian weaver attends to 2 looms, whereas a British weaver manages 4 to 6 looms and an American weaver manages 9 looms.
73
What general factors contribute to the low efficiency of Indian workers?
Factors include the challenging Indian climate and the poor physical condition of many workers.

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