Chapter 2- Factors of production

Occupationally Mobile

- Capable of changing use

Factors which affect the mobility of capital

Varies from case study to case study. Example a photocopier from a bank can easily be moved, but a dock cannot be moved.

Quantity of labour, and factors which may cause this change

- Numbers of workers available
* If the size of population is larger, there will be more people then the number of people available to work will increase
*If there are more people in the working group and less dependent class people, then the number of people available to work will increase
* If the retirement is higher, then the number of people available to work will increase
* If the school leaving age is younger then the number of people available to work will increase
* Attitude to working women is good then the number of people available to work will increase
- Number of hours they work for
* Differs from country to country
*This includes national and state holidays
*This also includes the amount of sick leaves per worker

Productivity

The output per factor of production in an hour

Quantity of capital, factors that affect it

-influenced by investment
- May wear-out over time

Net investment

gross investment minus depreciation, which is the change in the value of capital.

The factors that affect quality of capital

-Better technology

Most land is _________ mobile but geographically____________.

Occupationally, immobile

The payment labour receives is __________, whilst _________________ is the payment of the enterprise.

Wages/salary , profits

Output is ______________, whereas __________ is output per worker.

Production, Productive

What is meant by investment in the human capital

Spending money and time on educating and training workers.

Water taken from river would classify as which factor of production

Land

Factors of production

The economic resources of land, labour, capital and enterprise.

Land

Gifts of nature available for production. It refers to all the natural resources used in the production such as oil, coal etc. in addition, the water, plants, animals etc are also included. Example: Farmland, minerals, sea

Labour

Labour stands for the human effort (mental or physical) that is used in producing goods and services. Example: A teacher, workers

Capital

Referred to as producer goods as well. Capital refers to all the human made (man-made) goods used in production. Example: Machinery and equipment's

Consumer goods

Goods and services purchased by households for their own satisfaction.

Enterprise

It refers to the risk bearing and the key decision-making function in a business. This is needed as some events cannot be anticipated beforehand and might not qualify for being insured. Example: An entrepreneur

Geographically immobile

Incapable of moving from one location to another location

Mobility of labour

Workers might find it difficult to move from one country to another (geographically immobile) and may find it difficult to switch jobs (occupationally immobile).

Factors which affect labour to be geographically immobile

- Difference in prices and availability of housing in different areas
- Family ties- the whole family is settled there
-Different in education systems- People will not agree to move if it disrupts their child's education
- Lack of information- they are unaware of the job opportunities and have misinformation or no information
- Restriction on movement- Unable to get a visa to move from one country to another

Immigration vs. Emigration

Immigration - moving into a region or country
emigration - moving out of one region or country

Enterprise mobility

Most mobile factor. Both geographically and occupationally mobile.

Quality and quantity of Land

Quantity/ Physical land in existence cannot change. the quality however can change. For example, for agricultural land, we can use fertilisers to upgrade the land and and increase in pests will degrade the land.

factors that can affect ,Quality of labour

- Better Education
-Better Training
-Better Healthcare
-

Gross investment

Total spending on capital goods

Depreciation

Value of goods that have worn out or have degraded in quality

If gross investment exceeds depreciation there is ___________ investment.

net.

A key role of an enterprenur is to bear ______________ risks.

Uncertain