The nature and purpose of economic activity

Question 1

Factors of Production

Answer 1

There are 4 factors of production. In factors of production, the “inputs” are used in producing goods and services for the economy/used to make things people want and need (output)

Question 2

4 Factors of Production

Answer 2

Capital
Enterprise
Land
Labour

Question 3

Capital

Answer 3

Equipment used in producing goods / services - machine, factories, computers, assembly line

Question 4

Enterprise

Answer 4

A person setting up business, taking risks and create from other Factors of production.

Question 5

Land

Answer 5

Raw materials/natural resources like oil, coal, fruit, meat (from mining, fishing, farming)- scarce

Question 6

Labour

Answer 6

Work done by people who contribute to the production process

Question 7

Economic welfare

Answer 7

The level of wealth and quality of living standards in an economy

Question 8

Examples of factors that determine economic welfare

Answer 8

Real income-influence consumption
Happiness levels- happy people are more productive
Leisure time- if low, people are unhappy and unproductive
Education- if high, usually more job opportunities

Question 9

MPC

Answer 9

The monetary policy committee is part of the bank of England