Factors Of Production Ch#3 Flashcards
Define Entrepreneur
An individual who seeks out new business opportunities and is willing to take risks.
What are the resources available in an economy referred to as?
Factors of Production
Name the 4 FOP’s
- Land
- Labour
- Capital
- Enterprise
What is the reward/ income received for owning land called?
Rent
What is the reward/income for labour called?
Wages
What is the reward/income for owning capital called?
Interest
What is the reward/ income received for starting an enterprise called?
Profit
Define Economic Growth
Economic growth refers to the size of a country’s economy or an increase in GDP over a period of time.
Define Economic Growth
Economic growth refers to the size of a country’s economy or an increase in GDP over a period of time.
What is the difference between physical capital and human capital?
Physical Capital refers to wealth that is tangible like machinery ,buildings ,furniture etc.
Human Capital refers to intangible goods such as skills,abilities and knowledge of individual employees.
What is Economic Specialisation?
Specialisation is the process wherein a company or individual decides to focus their labour on a specific type of production.
What are advantages of Specialisation?
• Larger quantity of goods and services can be produced.
• Improved Productivity
• Production beyond PPC
• Resources can be used more efficiently
•increased exports
What are the De-Merits of Economic Specialisation?
• Job displacement
• Over-Reliance on Imports
• Surplus in production of goods and services
What is Division of Labour?
Division of Labour is the separation of work process into a number of tasks, where each task is performed by a separate person or a group of persons.
What are the advantages of Division of Labour?
• Leads to increase in output per worker
• Improvement in the quality of the finished product
