Business Basics Topic
Factors of Production
- Read notes
- Flashcards
- Quiz
- Confident
Study focus - 3 things
- The four factors of production are land, labour, capital, and enterprise
- Businesses combine these resources to make goods and services
- Easy to mix up - capital in business studies means man-made resources, not just cash
Section 1The four factors
Factors of production are the resources used to make goods and services. The four main ones are land, labour, capital, and enterprise. If one is missing, production becomes harder.
Section 2Land and labour
Land means natural resources, such as soil, water, minerals, and sunlight. Labour means human effort, including physical work and mental skills. A farmer in Jamaica uses land for crops and labour to plant, weed, and harvest.
Section 3Capital
Capital means man-made resources used in production. Tools, machines, buildings, computers, and delivery vehicles can be capital. Watch out: money helps buy capital, but in this topic capital usually means the equipment itself.
Section 4Enterprise
Enterprise is the skill of organising the other factors and taking business risks. The entrepreneur decides what to produce, how to produce it, and who to sell it to. In plain words, enterprise pulls the whole plan together.
Examples
A bakery uses flour, ovens, workers, and an owner who plans sales. Identify one factor of production shown by the ovens.
The ovens are capital because they are man-made resources used to produce bread and cakes.
A jerk chicken stall uses charcoal, a grill, a cook, and an owner who chooses the location and prices. Which factor is enterprise?
The owner choosing the location, organising resources, and taking the risk is enterprise.
Now let's water it
Session runs notes to flashcards to quiz back-to-back.