1.1 Economic Groups and Factors of Production - Coggle Diagram
1.1 Economic Groups and Factors of Production
What is Land as a factor of production?
All natural resources in the economy are classed as land. The reward for offering land for use is rent.
What is Labour as a factor of production?
All human resources that are available in the economy.
Size Age Working Migration Education Training Health/ SAWMETH
The reward for offering labour for use is wages.
What role do Consumers have in the economy?
Consumers buy goods and services for personal use.
They are the end user of a good as their decision is the very end of the production process
Consumers decide whether buying a good is worth it by weighing up the benefits against the price they will be paying
Consumers generally act on an individual basis and have little power in the market. They may need protecting by the government through legislation.
What is Capital as a factor of production?
All human-made aids to production.
TIM: Technology, Infrastructure, Machines
The reward for offering capital for use is interest.
What role do the Government have in the economy?
The government make and enforce rules within the country they run. Some of these rules will directly affect consumers or producers.
The government spend money in the economy. The government will also transfer money to individual consumers enabling them to spend. The Government act as buyers and services as producers.
Governments can affect the economy through their chosen policies. These choices influence the price, quantity and quality of a product.
What is Enterprise as a factor of production?
The organisation of the other factors of production to make goods and
Requires an individual (entrepreneur) to
Bear the risks of the project
What are Factors of Production? What does CELL stand for?
The resources in an economy that can be used to make goods and services.
CELL: Capital Enterprise Land Labour
What role do Producers have in the economy?
Supply goods and services.
They make choices about what and
how they produce.
They have influence over the quantity, price
What does interdependence mean in economics?
Each economic group responds to the actions off another group.
The decisions that each individual consumer, producer or government take all contribute to the final decisions on the use
How might factors of production be combined?
The world only has limited resources and increasing requirements for them from a growing population. If these resources are used to produce one thing, they can’t be
combined in another way to produce something else. Advances in technology play a part in how factors of production are combined – use of capital overtakes the use of labour.