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Factors of production - Coggle Diagram
Factors of production
Land
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Factor Mobility
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.
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Labour
People who work with their hands and use their brains to produce economic goods and services are known as labour
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.
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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.
Enterprise
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.
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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.
Capital
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Examples: Machinery, Company cars, Laptops etc.
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