Factors of production

• What is production ?

  Process by which resources are transformed into a more useful commodity or service.
• What are resources called ?

  inputs
• Factors of production?

  Resources are used to produce goods and services.
• What are finished goos called ?

  Output
• How to improve efficiency ?

  •Improving the fertility of land- Modern agricultural techniques enable farmers to achieve a greater output per acre

  •Using renewable or recyclable resources- Many factories are now designed to minimise waste.

  •Greater education and training in the workplace- This could lead to greater output from labour which is particularly important in the UK so we can compete with countries who offer lower wages.

  •Investment in capital equipment- Modern machinery can more greatly enhance the efficiency of the labour force.
• How many Factors of Labour of production are there ?

  FOUR; Land, Capital, Labour and Enterpise
• What is land?

  Land refers to natural resources.

  It includes:

  • in the air(oxygen)

  •in the land(gold)

  •in the water(pearls from clams)
• Why is land an important factor ?

  Land is an unavoidable factor, because it affects major issues like:

  •raw materials

  •electricity and water resources

  •Transportation ect.
• Characteristics of land?

  Land is fixed in supply

  It has no cost of production

  It is geographically immobile
• What is Labour??

  •All human effort- whether mental or physical that contributes to production.

  •It is either manufacturing or assembling.

  e.g. nurses, soldiers, teachers, construction workers.

  PAYMENT FOR LABOUR IS WAGES.
• Types of labour??

  Unskilled: little or no formal training e.g. street cleaners.

  Semi skilled: requires some formal e.g receptionists

  Skilled: requires high level of training e.g. Engineers

  Professional: Requires high levels of education and professional qualifications e.g. Doctors
• what is capital??

  Capital refers to all man-made resources used in the production prcosess.
• what does capital mean?

  Investment in goods that can produce other goods in the future.
• What does capital refer to?

  Machines, roads, factories, schools and office blocks which human being have produced in order to produce other goods and services.
• Types of capital

  Fixed: capital that does not change shape during production e.g. Tractors, machinery

  Working: Capital that is used up during production e.g. cash, materials

  Venture: Capital invested at the start up of a business e.g. Cash
• What is enterprise ?

  An enterprise is a newly formed business launching new products and services (gaps in the market)
• What is the reward for entrepreneurship?

  Profit
• what is organisation function?

  is the work of bringing the require factors together and making them work harmoniously.
• Risk bearing function?

  Entrepreneurs must bear risks and uncertainties as they can either incur loss or gain profit. “Risk bearer”
• Qualities of an entrepreneur

  Ability to organise

  Professional approach

  Risk taker

  Decision making

  Negotiation skills