Fators Of Production

Question 1

What is the definition of the factors of production?

Answer 1

The resources used in the production process, or inputs into production, including labour, capital, land and enterprise.

Question 2

What are the four factors of production?

Answer 2

• labour
• capital
• enterprise
• land

Question 3

What is labour in the terms of the factors of production?

Answer 3

Labour is the human interaction that combines capital and land as the factors of production into the final good or service.

Question 4

What is capital in the terms of factors of production?

Answer 4

The non-human resources used as inputs, such as stock, transport and machinery.

Question 5

What is enterprise in the terms of factors of production?

Answer 5

The enterpriser is the person who organises the three other factors of production, whilst also funding all the factors of production.

Question 6

What is land in the terms of factors of production?

Answer 6

The land and the natural resources that it produces is used to make the good or service.

Question 7

What is the reward for labour in the factors of production?

Answer 7

When households supply their labour, they do in return for salaries.

Question 8

What is the reward for capital in the factors of production?

Answer 8

Interest is the return for capital, by keeping the capital the business is losing the money that the capital is worth by not saving it.

Question 9

What is the reward for enterprise in the factors of production?

Answer 9

Profit is the reward for enterprise.

Question 10

What is the reward for land in the factors of production?

Answer 10

The rent is the reward for land, as the land can be rented to other economic agents.