Econ: 1.2 - The factors of production

what are factors of production?

what are factors of production?

the resources needed for production of goods and services Land, Labour, Capital and Enterprise

what is land?

all natural resources used to produce goods and services eg: cotton, coffee reward: rent

what is labour?

human efforts used to produce goods and services (mental, physical, skilled or unskilled) eg: teacher, doctor reward: wages/salary

what is captial?

man-made resources used for the production of goods eg: furniture, vehicle reward: interest

What is enterprise?

Skill of creating the good or service, ability to make risks and make decisions known as entrepreneur eg: managers and owners reward: profit

Mobility

geographically- capable of moving from one location to another location Occupationally- capable of changing its use

mobility of land

Occupationally mobile Geographically immobile

mobility of labour

-can have high occupational mobility if workers have the right skills and qualifications -can be geographically mobile depending on ability to move and transportation facilities, housing and cost -can also be geographically and occupationally immobile due to lack of skills

Mobility of capital

-can be geographically and occupationally mobile depending on use of the capital eg: a pen is occupationally and geographically mobile -can be occupationally mobile and geographically immobile eg: a building

Mobility of enterprise

Geographically and occupationally mobile

what is quantity in factors of production?

the volume of resources available

what is quality in factors of production?

how useful or productive its factors of production are

quantity of land

amount of physical land does not change much (slight increase and decrease)

Quality of land

depends upon soil, fertility, weather etc

quantity of labour

depends upon size of population and other determinants of labour force

quality of labour

depends upon skill, education, training, qualifications and health of workforce

quantity of capital

Influenced by investment tends to increase with time

quality of capital

advances in technology enable capital goods to produce a higher output and a better quality output

quantity of enterprise

influenced by favourable economic conditions that produce entrepreneurs

quality of enterprise

depends on how well it is able to satisfy and expand demand in economy in cost-effective and innovative ways