Economics: Factors of Production and Industry Sectors

Study Notes

Factors of Production

Land - resources earth provides for businesses. Includes plots of land, coal, diamonds, wood, oil, and water.
Labour - workforce of a business. Includes human resources and employees.
Capital - Man-made resources that support businesses. Includes finances (money), tools, machinery, and equipment.
Enterprise - Entrepreneur uses land, labor, and capital to achieve a business idea, producing goods or services.

Sectors of Industry

Primary - businesses that extract natural goods from the earth. Includes fishermen, farmers, oil drillers, coal miners, and foresters.
Secondary - businesses that manufacture goods. Includes shipbuilding, construction, and factories.
Tertiary - businesses that provide services. Shops, hotels, window cleaners, hairdressers, banks, and post offices are included.
Quaternary - is the support sector and focuses on knowledge-based work. Includes education.

Creation of Wealth

Businesses create wealth by adding value to a product as it goes through the production process.

Disadvantages

Businesses can negatively impact the environment of a country or location.
The volume of non-renewable resources will decrease.
Greenfield sites (untouched land) are lost.
Too much demand on goods and services can cause inflation.

Advantages

Jobs are created, reducing unemployment.
People have access to training and learn new skills.
Demand increases as people have more money to spend.
Increase in taxes paid.
Improved infrastructure.

Description

This quiz explores the fundamental concepts of economics, focusing on the factors of production, including land, labor, capital, and enterprise. Additionally, it covers various sectors of industry such as primary, secondary, tertiary, and quaternary. Test your knowledge on how these components contribute to the creation of wealth in an economy.