Economics Grade 11 - Factors of Production

Flashcards covering factors of production, natural resources, labour, capital, entrepreneurship, and community participation in local economic planning.

Factors of Production

Resources (inputs) used to produce goods and services, including natural resources, labour, capital, and entrepreneurship.

Natural Resources

Resources that occur in a natural state and are used in the production process; gifts of nature with limited supply and uneven distribution.

Renewable Natural Resources

Natural resources that can be replaced when exhausted, such as trees that can be replanted.

Non-Renewable Natural Resources

Natural resources that cannot be replaced when exhausted, such as minerals.

Economic Importance of Natural Resources

Include production of finished goods, job creation in extraction and processing, export opportunities, foundation of production, and enhancing the quality of human life.

Remuneration of Natural Resources

Rent, influenced by demand, quality, distance to market, population, and climate.

Labour

Human physical or mental effort needed in the production process, including skills and knowledge.

Categories of Labour

Skilled, semi-skilled, and unskilled, based on knowledge and training.

Economic Importance of Labour

Most important factor of production; payment for labour is a main source of household income; quality and quantity are important for productivity and economic growth; contributes to national income.

Remuneration for Labour

Wages and salaries, determined by demand and supply in the labor market; includes nominal and real wages.

Nominal Wages

The amount of money in rands a worker receives for their labor, not affected by inflation.

Real Wages

The quantity of goods and services a worker can buy with their nominal wage, affected by inflation.

Capital

Goods used to produce other goods and services, such as machinery, tools, and buildings; divided into physical and financial capital.

Economic Importance of Capital

Increases efficiency in production, creates economic growth through capital widening and deepening, and makes standardization possible.

Capital Widening

When the stock of capital grows at the same rate as the labor force.

Capital Deepening

When the number of capital goods per worker increases; rate of increase in capital goods is higher than the rate of increase in workers.

Remuneration for Capital

Interest, the amount a producer pays for a loan received for buying capital goods, influenced by risk, period of loan, supply of funds, and monetary policy.

Entrepreneurship

The ambition and ability to open and successfully run a business enterprise.

Characteristics of an Entrepreneur

Good decision-making skills, organizer, driving force behind production, risk-taker, and ability to cope with uncertainty and stress.

Economic Importance of Entrepreneur

Ensures production takes place, creates employment, ensures productivity is achieved, and contributes to capital formation.

Remuneration for Entrepreneurship

Profit, influenced by the type of business, level of competition, and government intervention.

Community Participation in Local Economic Planning

Includes municipal/local government election, community forums, using the media, and petitions and legal demonstrations.

Economically Marginalised Groups

People excluded from participation in economic activities, such as uneducated people, rural people, disabled people, refugees, and school-leaving youth.

Government Action to Improve Situation of the Economically Marginalised Group

Empowerment through legislations like BEE/BBBEE and RDP, and procurement policies that prioritize purchases from previously disadvantaged people.