Factors of Production + Enterprise

Question 1

Labour

Answer 1

Human input/work in production process

Question 2

Enterprise

Answer 2

Organise factors of production and takes risks

Question 3

Capital

Answer 3

goods/ man-made things to supply other products.
(Diggers to build a school)

Question 4

What are the main purposes of business?

Answer 4

Producing goods,
supplying services
distributing goods
fulfilling a businesses need
providing a good or service to help others

Question 5

Can a business have more than one purpose?

Answer 5

Yes, diversification (spreading risk)

Question 6

Enterprise

Answer 6

Meaning business activity
or
skills displayed by an entrepreneur

Question 7

Entrepreneur

Answer 7

A person who sets up and runs a new business taking on the potential risks.

Question 8

Characteristics of an entrepreneur

Answer 8

Good leadership,
ambitious
risk-taking
decisive
uses their initiative
logical, to make and act upon good business opportunities,
creative, thinks differently
perseverance + hard-working

Question 9

Risks of being an entrepreneur

Answer 9

Strained relationships (social life)
health (stress)
financial risk (debt, no stable income)
reputation damage
legal issues (potentially depends on their legal structure)

Question 10

Rewards of being an entrepreneur

Answer 10

Financial gain
self satisfaction
independence
flexible working
fame/status

Question 11

Land
Advantages + Disadvantages

Answer 11

Advantages
- Natural resources are essential for production; without land, there can be no agricultural or resource-based industries.

Disadvantages
-The availability of land is limited and can be affected by environmental issues (e.g., climate change, deforestation). Businesses in land-intensive industries may face rising costs due to resource scarcity.

Question 12

Labour
Advantages + disadvantages

Answer 12

Advantage: A skilled and motivated workforce is critical to innovation, efficiency, and productivity. Labor also contributes to economic growth by increasing the potential output.

Disadvantage: Labor costs can be high, particularly in industries requiring skilled workers. Labor shortages (due to demographic trends or migration) or labor disputes can hinder productivity. Automation and AI can reduce labor reliance but might lead to job losses.

Question 13

Capital
Advantages + Disadvantages

Answer 13

Disadvantage: The cost of acquiring and maintaining capital equipment can be high, particularly for small businesses. Over-reliance on capital investment can reduce the need for labor, potentially leading to unemployment or a less diverse workforce.

Advantage: Capital can increase productivity, improve the quality of goods, and enable businesses to scale. It also allows for technological advancement and the ability to compete on a global scale.

Question 14

Impact of external factors on Factors of Production- Economic Conditions

Answer 14

Economic Conditions: Recessions impact the availability and cost of land, labor, and capital.
For example, during a recession, labor costs might fall due to higher unemployment, while during an economic boom, businesses might struggle to hire skilled labor.

Question 15

Impact of external factors on Factors of Production- Technological Change

Answer 15

Technological Change: Advances in technology can affect the demand for labor (automation) and capital (improved machinery), potentially lowering production costs and changing the way goods are produced.

Question 16

Capital vs Labour what kinds of businesses?

Answer 16

Capital-intensive businesses (e.g., car manufacturing) benefit from automation and scale, which can lower unit costs.

Labor-intensive businesses (e.g., hospitality) depend on human service and can create more local employment, but are vulnerable to labor market fluctuations and wage increases.

Question 17

Evaluate Capital intensive and labour intensive business impacts.

Answer 17

Capital-intensive: More efficient and scalable, but requires high upfront investment and may lead to fewer jobs.
Labor-intensive: Can provide more employment opportunities, but may face higher wage costs and be less scalable without significant capital investment.