The production process/economic resources

What is the production process?

what are factors of production?

the resources used by firms in the production process, they are the inputs.

what is Land (factor of production)?

natural resources such as coal but also physical land

What is labour (factor of production)?

describes the workforce of the economy, the physical and mental effort effort expended by humans

What is capital (factor of production)?

refers to man made resources not wanted for their own sake but for what they contribute to output.

What is enterprise (factor of production)?

how all the other factors are brought together, the entrepreneur develops the idea and then organises the other three factors of production

What is a factor reward/income?

income earned by the owners of the factors of production, for their use.

Give an example of a factor reward for land.

owner of the land receives rent for their services.

Give an example of a factor reward for labour.

owners of labour recieve a wage or salary for their services.

Give an example of a factor reward for capital.

Owners of capital receive interest for their services.

Give an example of a factor reward for enterprise.

the reward for their services is profit

What are the outputs from the production process?

Goods and services

what are consumer goods?

fall into two categories:

durable goods- goods that can be used repeatedly and for a long time

Non durable goods- single use goods that are used very soon after they are purchased

What are capital goods?

goods purchased by businesses to be used in the production of other goods and services

What are commercial services?

Services to industry such as banking and insurance

What are direct services?

Services to the public such as hairdressing

What are public services?

services provided by the state such as healthcare

what are by-products?

unintended outputs of a production process