Questions and Answers
Which of the following is an example of a factor of production for an ice-cream factory?
Which factor of production is generally considered the least mobile?
When a business closes, what can typically happen to the labour as a factor of production?
Which factor of production in an ice-cream factory refers to the raw materials used to make the ice cream?
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Under what condition might an entrepreneur be able to move their enterprise to an alternative industry after a business closure?
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Which of the following could be an example of land being adapted for an alternative use?
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Study Notes
Factors of Production
- Land: Refers to the physical space occupied by the factory and includes raw materials necessary for production, like milk.
- Labour: Encompasses all employees, including factory workers and office staff responsible for operations and administration.
- Capital: Represents the physical assets required for production, such as machinery used for making ice cream and the factory itself.
- Enterprise: Refers to the individual or group of individuals (entrepreneurs) who establish and manage the factory.
Mobility of Factors of Production
- Land: Typically adaptable for different purposes, as seen in the potential transformation of a coal mine into a new facility or use.
- Labour: Workers can often be retrained for different roles, offering flexibility in employment opportunities.
- Capital: Mobility is limited; specialized equipment or machinery is less versatile and may not easily transition to a different industry or task.
- Enterprise: Entrepreneurs may have the capacity to shift their skills and knowledge to alternative sectors, enhancing mobility within industries.
Business Closure Implications
- Factors of production can become idle or underutilized when a business shuts down.
- These factors can potentially be sold or repurposed in another industry, depending on their nature and adaptability, but the process may involve challenges related to specific capital and labor skills.
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Description
Explore the key components that make up the factors of production, specifically in the context of an ice-cream factory. Understand how land, labor, capital, and enterprise contribute to production processes and their mobility.
