1.1.2 Factors of Production

• Land refers to natural resources such as soil, minerals, and water
• Enterprise involves organizing and managing the other factors of production
• Understanding the factors of production is key to addressing the basic economic problem of scarcity
• What type of human effort is included in the labor factor of production?

  Physical and mental work
• What does labor as a factor of production refer to?

  Human effort and skills
• What is the role of enterprise in production?

  Organize and manage other factors
• The factors of production are the essential resources used in producing goods and services.
• What does enterprise as a factor of production involve?

  Organizing and managing production
• Why is land considered a fixed factor of production?

  Its supply is limited
• What economic problem does labor help address?

  Scarcity
• Labor is the human effort involved in production.

  True
• Understanding factors of production helps address scarcity and opportunity cost decisions.


  True
• Why is understanding the factors of production vital in economics?

  Addresses scarcity and opportunity cost
• Land as a factor of production includes natural resources such as soil, minerals, and water
• Labor includes physical work, mental work, and specialized expertise
• Capital as a factor of production includes physical tools and equipment
• What is included in the factor of production called land?

  Natural resources
• Match the factor of production with its description:

  Land ↔️ Natural resources

  Labor ↔️ Human effort

  Capital ↔️ Physical tools

  Enterprise ↔️ Organizing other factors
• Deciding how to use land involves considering opportunity cost.


  True
• Allocating labor involves considering opportunity cost.


  True
• What role does an entrepreneur play in enterprise as a factor of production?

  Organizing other factors
• What is an example of a variable factor of production?

  Labor
• Understanding the factors of production helps address the basic economic problem of scarcity.
• Understanding factors of production is crucial for addressing the basic economic problem of scarcity
• What does labor as a factor of production refer to?

  Human effort and skills
• Why is capital important as a factor of production?

  Boosts productivity
• Match the factor of production with its importance:

  Land ↔️ Provides raw materials

  Labor ↔️ Transforms raw materials

  Capital ↔️ Enhances productivity

  Enterprise ↔️ Coordinates other factors
• What are the factors of production needed to produce goods and services in an economy?

  Land, labor, capital, enterprise
• What is capital as a factor of production?

  Physical tools and equipment
• What are the four main factors of production?

  Land, labor, capital, enterprise
• Farmland used for agriculture is an example of land as a factor of production.


  True
• Land is a fixed factor of production because its supply is limited.


  True
• Workers in a factory are an example of labor as a factor of production.


  True
• What basic economic problem do the factors of production help address?

  Scarcity
• Capital as a factor of production includes machinery and equipment.

  True
• Understanding the factors of production is essential for addressing the basic economic problem of scarcity.
• Labor encompasses all human effort, including physical, mental, and specialized expertise.
• Capital as a factor of production refers to physical resources used to produce goods and services.
• Enterprise increases productivity by managing limited resources effectively.


  True
• Match the factor type with its characteristic:

  Fixed ↔️ Limited supply in short run

  Variable ↔️ Quantity can be adjusted