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Frequently Asked Questions - factors of production

FAQs - factors of production

Factors of production: 

  1. Land: natural resources available for production, e.g. oil, coal, forests, fish, farming. 
  2. Labour: human effort available for production/human capital, e.g. skilled/unskilled. 
  3. Capital: man-made physical goods used in production, e.g. machines, tools, factories (Do NOT accept money). 
  4. Enterprise: the role of the entrepreneur in terms of organising the other factors of production and in taking a risk in doing so. 

 

Examples for each factor must be given to fetch full marks.

Explanation should include the definition of LAND and examples

It refers to all those natural resources used in production.

Examples could include: Coal, oil, gold, fish, forests and the land itself 

This is a 4 marks questions. Therefore, the answer should go beyond just the definition and should include atleast two comparisons.

  1. Labour is human/effort/workers’ services, whilst enterprise is the ability and willingness to bear uncertain risks/organise other factors of production.
  2. The reward for labour is wages whereas the reward for enterprise is profit 
  3. Enterprise tends to be more geographically or occupationally mobile than labour

 

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