Production
Overview
Before a single product reaches a shop shelf, an economy has to combine raw ingredients: a plot of land, the effort of workers, machinery and money, and someone willing to take the risk of putting it all together. Economists group these ingredients into four factors of production, and every business, however small or large, uses some combination of all four.
In this lesson you will define land, labour, capital and enterprise, compare labour-intensive with capital-intensive production, and explore how output and jobs are split between the primary, secondary and tertiary sectors. You will also see how that balance shifts as economies develop, and why manufacturing has declined in many rich countries even as it has grown in others.
Objectives
- The factors of production: land, labour, capital, enterprise
- Sectors of the economy: primary, secondary, tertiary
- Changes in the importance of these sectors in terms of employment and output over time in developing and developed economies
Lesson Note
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Lesson Evaluation
Congratulations on completing the lesson on Production. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- Which of the following is an example of the factor of production 'enterprise'? A) A farmer's field B) A delivery van C) An entrepreneur starting a new bakery and risking her savings D) A factory worker's wages Answer: C
- Working capital refers to: A) Machinery and buildings used repeatedly in production B) Stocks of raw materials and components held ready for production C) Money paid to shareholders D) The site a business occupies Answer: B
- A firm of accountants belongs to which sector of the economy? A) Primary B) Secondary C) Tertiary D) Quaternary Answer: C
- Which of the following best explains de-industrialisation in developed economies? A) A rise in the primary sector's share of output B) A decline in the secondary sector's share of output or employment relative to the tertiary sector C) A fall in total national income D) A ban on manufacturing imports Answer: B
- Capital-intensive production is most likely to be chosen when: A) Wages are very low relative to the cost of machinery B) Wages are high relative to the cost of machinery C) The business is very small D) The product must be highly customised by hand Answer: B
Available on the Green Bridge App
Download the Green Bridge CBT app on your phone or computer to access full lesson notes, practice questions, and more.
Available on the Green Bridge App
Download the Green Bridge CBT app on your phone or computer to access full lesson notes, practice questions, and more.
Recommended Books
Practice Mock Questions
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