Revision:Factors of Production
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A factor of production is defined as a productive resource. There are 4 types of factors of production:
- Land - all natural resources including oil, fish, soil, forests. The reward for land is rent.
- Labour - the skills of the workforce and the quantity of labour they produce. The reward for labour is wages.
- Capital - investment in man-made aids to production including buildings, factories, computers. The reward for capital is interest.
- Entrepreneurship - the risk-taking role of business owners undertaken in the pursuit of profit. Can be considered as a specialised form of labour. The reward for entrepreneurship is profit.
Classifying industries
The three main sectors of the economy are:
- Primary sector - extracting raw materials
- Secondary sector - processing, manufacturing and assembling raw materials into goods
- Tertiary sector - aid the production of goods (e.g. lorry driving) and sell services
In a MEDC such as the UK the majority all economic activity is the tertiary sector (currently 76%).
Also See
Take a look at the other unit 1 A level economics revision notes:
- The Economic Problem (AQA, Edex, OCR, WJEC)
- Factors of production (AQA, OCR)
- Positive and normative economics (AQA)
- Specialisation and Trade (AQA, Edex, OCR, WJEC)
- Producer and consumer surplus (AQA, Edex, OCR, WJEC)
- Demand theory (AQA, Edex, OCR, WJEC)
- Supply theory (AQA, Edex, OCR, WJEC)
- Supply and Demand Equilibrium (AQA, Edex, OCR, WJEC)
- Elasticity of demand (AQA, Edex, OCR, WJEC)
- Elasticity of supply (AQA, Edex, OCR, WJEC)
- The Price Mechanism (AQA, Edex)
- Indirect Taxes and Subsidies (Edex)
- The labour market (Edex)
- Economies of scale (AQA)
- Allocative efficiency (OCR)
Also See
Take a look at the other unit 1 A level economics revision notes:
- The Economic Problem (AQA, Edex, OCR, WJEC)
- Factors of production (AQA, OCR)
- Positive and normative economics (AQA)
- Specialisation and Trade (AQA, Edex, OCR, WJEC)
- Producer and consumer surplus (AQA, Edex, OCR, WJEC)
- Demand theory (AQA, Edex, OCR, WJEC)
- Supply theory (AQA, Edex, OCR, WJEC)
- Supply and Demand Equilibrium (AQA, Edex, OCR, WJEC)
- Elasticity of demand (AQA, Edex, OCR, WJEC)
- Elasticity of supply (AQA, Edex, OCR, WJEC)
- The Price Mechanism (AQA, Edex)
- Indirect Taxes and Subsidies (Edex)
- The labour market (Edex)
- Economies of scale (AQA)
- Allocative efficiency (OCR)
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