Factors of production
Land
Labour
Enterprise
Capital
Factor reward: When a firm earns more revenue from the goods or services it provides than the cost of making those, the surplus is known as profit. Entrepreneurs receive this as a reward for organising production. However, if there is no profit and surplus revenue, these entrepreneurs may not be paid and may suffer a loss.
Definition: The ability to organize the other factors of production in a firm is known as enterprise. People who organize production in a firm are known as entrepreneurs.
All natural resources are known as land.
People who work with their hands and use their brains to produce economic goods and services are known as labour
Improving and impacting the quality and quantity of enterprise
Quality
Quantity
More support and better advice for newer entrepreneurs will also improve the quality of enterprise.
More and better opportunities for aspiring entrepreneurs to train and improve their skills will lead to an improvement in quality.
Having more training programs and better support for entrepreneurs would encourage more people to become entrepreneurs.
The factor reward for land is rent.
Factor Mobility
Examples
Improving the Quantity and Quality
Human made resources used further in production
The factor reward for labour is wages. The amount of wages depends on the firm. Some workers may get paid by the hour while others may get paid by the number of tasks completed.
Improving the Quantity and Quality
Quantity
Quality
Increase in wages can convince more people to supply their labour to firms
Increase in the population of the working age
Improvement in healthcare to reduce the number of days people are absent from work due to sickness and to help people live and work for longer
Training and education can improve workforce skills and the amount, range and quality of goods and services people can produce
Factor Mobility
Most worker are occupationally immobile as they have specific skills. For example, it's hard for a doctor to become a lawyer overnight without years of training
Many workers are also geographically immobile as they are reluctant to move from family, it can be expensive etc.
Factor reward:Interest
oil
wood
Examples: Machinery, Company cars, Laptops etc.
Factor mobility: Geographically, factor mobility of enterprise is similar to labour, as people (entrepreneurs in this case) can move but they may have family attachments or expenses as a reason they don't want to move.
Land could be immobile as well as mobile depending on the resource. for example: Oil can be easily moved as it can be stored in containers but you cant move a forrest from the soil.
Factor Mobility
Improving the quantity