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21 Cards in this Set
- Front
- Back
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What is the factors of production? |
The basic building blocks that, in combination, are required to make a business, and produce things. Or in other words; the factors that are required to "produce" goods and services. |
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Name all the factors of production |
-Natural Resources -Labor -Capital -Entrepreneurship |
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What are Natural Resources? |
Things found in nature. Resource that grow out of the earth or can be extracted from it -People will pay for it -Farming, fishing, and timber |
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What is Resource Intensive? |
An activity that is predominantly dependent on the production or use of natural resources -Business whose activities are predominant dependent on the production or use of natural resources are called resource intensive -A good example of a resource intensive industry might be apple growing(They need to acquire a great deal of land, may need to divert water for irrigation, and sells a product that is entirely natural) |
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What is Labour? |
The people who contribute their efforts to a business -Every business needs at least one worker -Walmart hiring employee's to do task |
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What is labour intensive? |
A business or a process that requires a large amount of labor to produce its good or service -Walmart hiring several people to do its task |
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What is Capital? |
Money or the machines and technologies that money can buy. -The tutoring business, you would need, pen, pencil, calculator, and etc. -Farmers need tools |
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What is capital intensive? |
A business or a process that requires a large amount of money, machines, or technology to produce its goods or services. -Banks -Toyota |
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How do businesses make products? |
By combining factors of production |
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What does the theory of factor of production suggest? |
That all business, whether large or small, use some combination of these factor of product to conduct their affairs. -A business replacing people with machines -A clothing company using expensive or cheaper matieral |
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Why does China and India be the most labour intensive? |
Because of the low labour cost |
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What is the industrial revolution? |
A series of technologies developments and inventions (Many of them labour saving) that transformed the manufacturing, agriculture, mining, and transportation industries in the 18th century -Example the spinning jenny in the 1700s, where it changed the spinning wheel which required one worker usually to be automatic |
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What did the industrial revolution cause? |
Meant that many jobs that had been previous been done by hand became obsolete. As a result, the standard living rose in europe |
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What is factor substitution? |
Substituting one factor of production (For example capital) for another (for example labour) so that products can be made more quickly or cheaply -The phenomenon of replacing human workers with faster, more efficient machines is called factor substitution |
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What are Entrepreneurs? |
The people who are motivated to take the time, to incur the costs and risks, and make the effort to make something happen. -The person who imitates the start of a business |
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What is an enterprise? |
A project or undertaking that requires energy and effort and whose outcome is uncertain. -The tutoring examples |
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What is an Entrepreneurship? |
The willingness or the motivation to take initiative, and to accept the risk of failure in return for suitable gratification or reward. -Entrepeneurs assemble and organise the other factors of productions to create businesses |
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What is the existence of the factors of production? |
A theory |
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What is a theory? |
An idea, which is an attempt to explain something complicated, hard to understand, or hard to prove. -Big bang theory, Theory of evolution -These theories suggest that the businesses need to collect vast amounts of information to understand and successfully meet the need of their customers, and effectively use their natural resources, labour, and capital |
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What are theorist suggesting the fifth factor of production be? |
Information |
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What can you conclude this as? |
Everything is made of part. The businesses are made up of combination of four parts -Natural resources (Raw materials) -Labour (People) -Capital (Money and technology) -Entrepreneurship (The willingness and motivation of individual to start a business ) |
