1.2 Factors of Production (Cambridge (CIE) IGCSE Economics) Flashcards

Exam code: 0455 & 0987

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Cards in this collection (10)

  • Define factors of production.

    The factors of production are resources used to produce goods and services. They are land, labour, capital, and enterprise.

  • Name the four factors of production.

    The four factors of production are land, labour, capital and enterprise.

  • Define capital (as a factor of production).

    Capital is any man-made resource used to produce goods and services, such as tools, machines, and buildings.

  • What is enterprise in the context of production?

    Enterprise is the factor of production that involves taking risks and organising the other factors to produce goods and services, usually by an entrepreneur.

  • The factor income for labour is       , while for capital it is        .

    The factor income for labour is wages, while for capital it is interest.

  • In a market economic system, who owns the factors of production?

    In a market economic system, the factors of production are privately owned by households or firms.

  • Firms purchase land, labour, and capital from households in          markets.

    Firms purchase land, labour, and capital from households in factor markets markets.

  • How can technological advances affect the factors of production?

    Technological advances can increase both the quality and quantity of factors of production, improving an economy's productive potential.

  • True or False?

    An increase in the quality or quantity of factors of production shifts the production possibilities curve outward.

    True.

    An increase in the quality or quantity of the factors of production allows a country to produce more, shifting the production possibilities curve outward.

  • A positive net birth rate or positive net migration rate will increase the quantity of       available in an economy.

    A positive net birth rate or positive net migration rate will increase the quantity of labour available in an economy.