Factors of Production (Edexcel IGCSE Business): Flashcards
Exam code: 4BS1
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Define the factors of production.
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Cards in this collection (14)
Define the factors of production.
The factors of production are the resources used to produce goods and services.
Name the four factors of production.
Land, labour, capital, and enterprise.
Define land as a factor of production.
Land is the non-man-made natural resources available for production.
Define capital as a factor of production.
Capital is any man-made resource used to produce goods or services (e.g. tools, machines, buildings).
Define labour as a factor of production.
Labour is the human input into production — mental or physical effort, which can be skilled or unskilled.
Define enterprise as a factor of production.
Enterprise involves taking risks to set up or run a firm, combining the other factors to produce goods/services for profit.
Producing any good or service requires a combination of four factors of production.
Producing any good or service requires a combination of all four factors of production.
Give an example of land as a factor of production.
Natural resources such as oil — e.g. Kuwait specialises in oil, which makes up 95% of its exports.
What does an entrepreneur do?
Decides the combination of factors of production needed to produce goods/services, aiming to make a profit.
In a capital-intensive process, what is labour mainly used for?
For specialist-skill tasks (e.g. design) and to oversee the operation of machinery.
Rapid advances in have made capital-intensive processes more affordable for smaller businesses.
Rapid advances in technology have made capital-intensive processes more affordable for smaller businesses.
Why is winemaking (viticulture) a labour-intensive process?
It relies heavily on workers (pickers, viticulturists), with machinery used only for hazardous or continuous tasks like fermentation.
True or False?
Only one or two factors of production are needed to make any good or service.
False.
Producing any good or service needs a combination of all four factors of production.
True or False?
In countries with low labour costs, such as Thailand and Vietnam, clothing is often mass-produced using labour-intensive processes.
True.
Where labour costs are low, there is little incentive to use machinery, so production stays labour-intensive.
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