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Economics > Section 1.2 Factors of Production > Flashcards

Section 1.2 Factors of Production Flashcards

1
Q

What are factors of production?

A

The economic resources of land, labour, capital and enterprise

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2
Q

What is land? (factor of production)

A

Land is all the natural resources used in producing a good or service
Example: water, land, ocean, fish

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3
Q

What is labour? (factor of production)

A

Human effort used in producing a good or service

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4
Q

What is capital? (factor of production)

A

Human made goods used in production

Example: Truck

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5
Q

What is enterprise? (factor of production)

A

Risk bearing and key decision making in business

Example: CEO

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6
Q

What are capital goods?

A

Human made goods used in production (NOT INVESTMENTS like it is in business studies)

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7
Q

What are consumer goods?

A

Goods and services purchased by households for their own satisfaction

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8
Q

What does occupationally mobile mean?

A

Capable of changing use/ Can be used for multiple purposes

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9
Q

What does geographically immobile mean?

A

Incapable of moving from one location to another location

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10
Q

Is land occupationally mobile?

Is land geographically mobile?

A

Land is occupationally mobile
Example; Farming land can be used to build houses

Land is not geographically mobile
Example: You can’t move Sri Lanka back to India

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11
Q

Is labour occupationally mobile?

Is labour geographically mobile?

A

It depends on the workers, some may find it difficult to move from area to area and from one type of job to another.

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12
Q

What causes geographical immobility of labour?

A
  • Differences in price and availability of housing in different areas and countries
  • Family ties
  • Differences in education systems in different countries
  • Lack of information (people with poorly paid jobs may be unaware of job opportunities in other areas)
  • Restriction on the movement of workers (work visa)
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13
Q

Is capital occupationally mobile?

Is capital geographically mobile?

A

It depends of the type of capital good. For example, a delivery van can be used to deliver food or toys (occupationally mobile).
For example, a copywriter in a bank can be moved to another area however a mine or a dock cannot (geographically mobile).

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14
Q

Is entreprise occupationally mobile?

Is entreprise geographically mobile?

A

It depends on the mobility of the entrepreneurs. However most of the time entreprise is both occupationally and geographically mobile.

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15
Q

What factors affect the quantity of labour?

A
  • The size of the population
  • The age structure of the population
  • The retirement age
  • The school leaving age
  • Attitude to working women
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16
Q

What is the labour force?

A

People in work and those actively seeking work

17
Q

What factors affect the number of hours people work?

A
  • The length of the average working day
  • Whether the workers work full-time or part-time
  • The duration on overtime
  • The length of holiday
  • The amount of time lost through sickness
18
Q

What is productivity?

A

The output per factor of production in a given amount of time

19
Q

What is labour productivity?

A

Output per worker hour

20
Q

What is output?

A

Goods and services produced by the factors of production

21
Q

How can you increase the quality of labour?

A

Better education, training and healthcare

22
Q

What are investment?

A

Is the money spent on capital goods

23
Q

What is gross investment?

A

Total spending on capital goods

24
Q

What is depreciation (capital consumption)?

A

The value of capital goods that have worn out or become obsolete

25
Q

What is net investment?

A

Gross investment minus depreciation

26
Q

What is negative net investment?

A

A reduction in the number of capital goods caused by some obsolete and worn out capital goods not replaced (gross investment lower than depreciation)

27
Q

What increases the quality of capital?

A

New technology

28
Q

How can you increase the quantity of entreprise?

A
  • Quantity of the entreprise will increase when there are more entrepreneurs
  • Good education
  • Lower taxes on firms
  • Reduction in government regulations
29
Q

How can you increase the quality of entreprise?

A
  • Better education
  • Better training
  • Better healthcare
  • More experience

Economics (6 decks)

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