Factors of production

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9 Terms

1
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What are the factors of production

land, labour, capital and enterprise.

2
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what is entrepreneurship?

Managerial ability. The entrepreneur is someone who takes risks, innovates, and uses the factors of production. Resources are drawn together into the production process.

3
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what is capital?

  • Physical: goods which can be used in the production process

  • Fixed: Machines; buildings

  • wWorking: finished or semi-finished consumer goods

4
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what is land?

Natural resources such as oil, coal, wheat, water. It can also be the physical space for fixed capital.

5
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What is Labour?

Human capital, which is the workforce of the economy. This includes managers and employees.

6
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what is the incentive for entrepreneurship?

Profit- an incentive to take risks

7
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what is the incentive for capital?

Interest from the investment

8
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what is the incentive for land?

rent

9
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what is the incentive for Labour?

Wages