chapter 2- factors of production

what are the factors of production?

resources used to provide goods and services

what are the 4 factors of production?

land, labour, capital, enterprise

why are factors of production important?

they are needed to provide goods and services

what is land?

natural resources used in production

what is the reward for land

rent

what is labour

physical and mental human effort put into production

what is the reward for labour

wages

what can effect quality of labour

education, training,skills, health, experience

how can a country increase productivity of labour

improving education, training, skills, and health conditions of workers

what is capital

man-made goods used to produce goods and services

what is reward for capital

interest

what is capital accumulation

an increase in stock of capital goods

how can a company increase its capital

investing in more machinery, technology or buildings

what is enterprise

ability to organise and combine the other factors of production and take risks

what does an entrepreneur do

organises land,labour and capital to produce goods and services and take risks

what risk does an entrepreneur take

the risk that the business may not succeed or may make a loss

what is occupational mobility

the ability of one factor of production to move from one type of job or occupation to another

geographical mobility

a worker moving from one city or country to another for a job

what can reduce geographical mobility of labour

family commitments, housing costs, lack of information and costs of moving

what can reduce occupational mobility of labour

lack of skills, qualification, training or experience