Economics A LEVEL

Economics A LEVEL

1. ·

   • FOP
     • Land- the natural gifts of nature like the earth, the sea and everythiung in it like gold and fish
       • enterprise- usually manifested as an entrepenure, someone who takes risks and combines the other 3 factors of production in production of goods and services in anticipation for demand
         • Labour- the human mental and physical effort used in the production of goods and services like builders and treachers
           • Capital- the material used in production of further wealth. Fixed capital like buildings and machinery and working capital like stocks of raw materials
   • Specialisation
     • When individuals/ groups or even a whole economy focus on the production of certain goods and services over others... this increases output and efficiency gains
       • Producers can use this to their advantage and exchange their surplus materials with other individuals/ groups or economies who specialise in different goods
         • However specialisation may be risky because ie if a economcy is specialised in the production of one good and defmand for that good declines, there will be an occurrence of strucrtual unemployment where the workers will be unemployed until they have learnt new skills and new knowledge to befit the production of other goods and services

2. Division of labour

   • Workers are able to work in the place of production they operate best and divide the labour depending on the skill and knowledge of workers
     • It is good because... managerial control, individual aptitudes, time-saving and