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Questions and Answers
Which of the following is an example of a factor of production for an ice-cream factory?
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?
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?
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?
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?
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?
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.
