• Production
  • resources → goods/ services
  • sanity needs/ wants

Factors of production

• land
  • location
  • natural resources
    • Non-renewable: cannot be replaced
    • Renewable: replaced by nature
• labour
  • workforce
  • manual workers/ skilled workers/ managers
  • quality varied
  • human capital ↑ : training/ education
• capital
  • artificial resource: labour
  • working/ circulating capital: will be used up
    • raw materials
    • finished good
  • fixed capital: used in production
    • factory/ office/ shop
    • machine/ tool/ equipment
• enterprise/ entrepreneurs
  • owners: set up/ running business
  • risk taker: money
  • organize other factors
    • decision maker
    • management
    • financial judgement

• Productivity: output per unit of input

  • Methods to increase productivity
    • ↑ factors of production
    • ↑ efficiency
    1. new working practice
    2. new incentive schemes
    3. efficient machinery
    4. retraining

  → more goods/ serviced with same resource

  → costs ↓

  → profit ↑