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Factor of production - Coggle Diagram
Factor of production
Four factors of production
Land: Businesses will need a plot of land to locate their
premises
Labour: The workforce of economy is labour
Capital
Fixed capital: Stock of human-made resources
Machine and tools used to help make product
Working capital: Stock of raw materials and components that will be used up in production or stock of finished goods that are waiting to be sold
Enterprise
Responsible for setting up and
running business
Risk takers
Responsible for organising resources
Business owners
Specialisation and the division of labour
Specialisation: The production of limited range of goods by an individual, business, region or nation
Division of labour: Worker's skills
improve as they regularly repeat the
same task
Capital intensive/Labour intensive
Labour intensive
Advantages
More flexible than capital
Cheaper for small-scale production
cheap
People are creative and can solve problem and make improvement
Disadvantages
more difficult to manage
unreliable
breaks and holidays
need to be motivated to improve
performance
Capital intensive
Advantages
More cost effective if large quantities are produced
more precise and consistent
operate 24/7
easier to mange than people
Disadvantages
Long delays may occur when there is a breakdown
Huge set-up costs
May be inflexible-A lot of machinery is highly specialised
May leave the workforce facing redundancy and
effect morale