gcse economics - factors of production
Factors of production are the resources of LAND, LABOUR, CAPITAL and ENTERPRISE used to produce goods and services.
Land is the natural resources on the planet. It includes space on the ground, hills, seas, oceans, air etc
Labour is the human input (workers, managers etc) into the production process. The UK has about 58 million people of which approximately 35 million are of working age.
Each individual has a different level of skills, qualities and qualifications. This is known as there HUMAN CAPITAL.
Man made physical goods used to produce other goods and services.
Examples include machines, computers, tools, factories, roads etc.
Increases in the level of capital are called INVESTMENT
The entrepreneur provides the initial ideas.
They risk their own resources in business ventures. They also organise the other 3 factors of production.
A Think about your school. What evidence is there of the 4 factors of production land, labour, capital and enterprise?
B Now do the same for a business that you know something about.
C What qualities are needed in an effective entrepreneur?
D Think about your own human capital. What skills and qualities do you have?
E Is it possible to improve the factors of production e.g. make labour or capital better?
F What do you think is meant by capital intensive production or labour intensive production?
These GCSE Economics revision notes have been kindly provided by Peter Davies of Mill Hill School, Ripley
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