1.2.1 Production

Factors of production (4)

(CELL)

Capital

Enterprise

Land

Labour

Capital

Physical assets or man-made resources used in production. Including machinery, tools, buildings. Capital can be physical capital or financial capital (money)

Enterprise

The ability to come up with a business idea, coordinate tasks, take risks, make decisions. An entrepreneur manages the other factors of production to make goods/services

Land

All natural resources including land itself, water, minerals, forests (resources found in or on the land)

Labour

Workers. It includes skills, abilities and time contributed by workers. 

Sectors of the economy (4)

Primary

Secondary

Tertiary

Quaternary

Primary sector

extraction of raw materials – mining, fishing and agriculture.

Secondary (manufacturing) sector

concerned with producing finished goods, e.g. Construction sector, manufacturing and utilities, e.g. electricity.

Tertiary (sevice) sector

concerned with offering services to consumers. This includes retail, tourism, banking, entertainment and  I.T. services.

Quaternary sector

Comprises of technology-based services like IT, R&D, financial planning, and intellectual expertise.

Different stages of development in a country

Emerging

Developing

Developed

Emerging

(less economically developed countries or LEDCs with high economic growth) – Secondary may be largest. Tertiary is smaller than developed economies. Primary is smaller than developing economies.

Developing

Largest area is primary (more than 50%), Tertiary and secondary are smallest. Often tertiary is 2^nd biggest due to tourism.

Developed

Largest area is tertiary (more than 50%), 2^nd largest is secondary and smallest is primary