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IGCSE Economics (0455) > Unit 2 > Flashcards

Unit 2 Flashcards

1
Q

Define Factors of Production.

A

The economic resources required for production of goods and services.

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2
Q

What are the four Factors of Production?

A

Land, labour, capital, enterprise.

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3
Q

Define Land as a FoP and give examples.

A

Natural resources available for production e.g land, forests, fishing, mining etc

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4
Q

Define Labour as a FoP and give examples.

A

Human effort used in production. Example, a sweeper, a bank manager etc

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5
Q

Define Capital as a FoP and give examples.

A

Human made goods used in production. Example machines, equipment, lorries etc

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6
Q

Define Enterprise as a FoP

A

The willingness of the entrepreneur to bear risks and his ability to make decisions in a business.

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7
Q

What is occupationally mobile?

A

Capable of changing use

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8
Q

What is geographically mobile?

A

Capable of moving from one location to another

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9
Q

What is occupationally immobile?

A

Incapable of changing use

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10
Q

What is geographically immobile?

A

Incapable of moving from one place to another

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11
Q

Is land mobile (occupationally and geographically?)

A

Most land is occupationally mobile (can be used for a number of purposes). In traditional sense, it is geographically immobile as a section of land can’t be moved from one place to another but some forms of land, example wildlife, are geographically mobile.

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12
Q

Is labour mobile (occupationally and geographically?)

A

It varies. Due to various reasons, workers might not be able to move from one area to another (geographically immobile) or vice versa. They may find it difficult to switch from one job type to another (occupationally immobile) or vice versa.

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13
Q

Is capital mobile (occupationally and geographically?)

A

Varies according to type of capital good. Some can be moved from one place to another while others cannot (geographical immobility) and some can be used for a number of reasons while others have specific purpose (occupational immobility)

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14
Q

Is enterprise mobile (occupationally and geographically?)

A

Depends on mobility of entrepreneurs. The skills can be applied to number if industries so occupationally mobile. Business could successfully be started in another place too so geographically mobile.

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15
Q

What is the quantity of land?

A

Physical land does not change much though soil erosion reduces agricultural land while land reclamation increases its supply. Other natural resources can change significantly for example forests Renewable resources are replaced by nature example wind power but non renewable can diminish in numbers if over exploited

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16
Q

What is the quality of land?

A

Quality may increase or decrease due to various reasons eg fertilizers, drainage, pollution etc

17
Q

What is quantity of labour?

A

Influenced by number of workers available (determined by size and age structure of population, retirement and school leaving age etc) and number if house they work (determined by length of working day, part time or full time, duration of overtime, length of holidays etc)

18
Q

What is quality of labour?

A

Productive labour force can be achieved by better education, training, experience (carry out more tasks efficiently, complex work, more better quality output) and healthcare (concentration, strong for manual tasks etc)

19
Q

What is quantity of capital?

A

Influenced by investment and tends to decrease over time due to physically wearing out or becoming outdated. However, new capital goods replace these which are better.

20
Q

What is quality of capital?

A

Advances in technology enable capital goods to produce higher and better quality output.

21
Q

What is quantity of enterprise?

A

Increases with more entrepreneurs (good education, related degrees courses) and firms (govt incentives)

22
Q

What is quality of enterprise?

A

Can be improved it entrepreneurs get better education, training, experience and healthcare. Knowledge and understanding.

23
Q

What are the payments for each FoP?

A

Land: rent
Labour: wages or salary
Capital: interest
Enteprise: Profit

24
Q

Define labour force

A

People in work and those actively seeking work

25
Q

Define productivity

A

The output per factor of production in an hour

26
Q

Define labour productivity

A

Output per worker per hour

27
Q

Define output

A

Goods and services produced by Factors of production

28
Q

Define investment

A

Spending in capital goods

29
Q

Define Gross Investment

A

Total spending on capital goods

30
Q

Define depreciation (capital consumption)

A

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

31
Q

Define net investment

A

Value of extra capital goods made (gross investment minus depreciation)

32
Q

Define negative net investment

A

a reduction in number if capital goods caused by some obsolete and worn our capital goods not being replaced

IGCSE Economics (0455) (3 decks)

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