Economics Factors of Production Quiz

Factors of Production

• Four factors of production exist
• Land: includes property and natural resources
  • Natural resources include raw materials, ingredients, and supplies
• Capital: includes money, raw materials, supplies, and ingredients
• Labour: includes physical, mental, and automated work

Types of Natural Resources

• Examples of natural resources include fishing, trapping, fuel and energy, logging and forestry, mining, agriculture, and water.

Liquidity

• Liquidity refers to how easily an asset can be converted to cash without loss
• Quickly exchanging assets for cash is important for businesses

Types of Production

• Craft Production: Handmade, customized items like pottery and furniture
• Mass Production: Standardized goods on assembly lines, like cars and electronics
• Job Production: Unique, custom products, like software and bridges
• Service Production: Intangible services, such as healthcare and banking
• Batch Production: Goods made in groups, like baked goods and clothing
• Mass Customization: Mass-produced items that can be personalized, like custom laptops

Production Process

• Product Designing: Creating a plan for a product that considers its functionality, aesthetics, and customer needs
• Purchasing: Acquiring necessary raw materials, components and supplies for production
• Processing: Turning raw materials into the finished product through manufacturing or assembly
• Quality Control: Inspecting and testing products to ensure standards and specifications are met before delivery

Product Grading

• Product grading categorizes products by quality, size, or other standards.
• This informs consumers about the product value
• Examples: food (e.g., eggs, meat, fruits, vegetables), electronics (grade A, B, C), lumber, fuel (e.g., gasoline), and dairy (e.g., milk, cheese)

Purchasing Department Responsibilities

• Procurement: obtaining goods, materials, and services needed by the company
• Supplier Management: finding, assessing, and maintaining relationships with providers
• Cost Control: negotiating prices and budgets to minimize costs
• Inventory Management: maintaining sufficient inventory levels and preventing overstocking or shortages
• Compliance: ensuring purchases adhere to legal, ethical, and quality standards
• Documentation: keeping records of purchases, contracts, and supplier details

IT Department Responsibilities

• Cloud Computing: using cloud-based services
• Transactions: managing online transactions
• Data: handling data
• Internet access: providing internet access
• Software: providing software
• Hardware: managing hardware
• Communication and technology: managing communication services

Capital Investment

• Capital investment is used to gain or improve long-term assets like equipment, property, or technology
• It aims to enhance growth and productivity

Human Capital

• Human Capital includes employee skills, knowledge, experience, and abilities
• It contributes to an organization's productivity and success

Types of Training

• Initial training: introductory training
• Ongoing training: continuous learning sessions
• Retraining: retraining employees
• Specialized training: specific skills development training programs