View IGCSE Member Area Reeources

1.2 Factors of production

IGCSE Economics Notes  Factors of production  2026/2027/2028/2029  Exams

IGCSE Economics Notes Factors of Production

 

Syllabus Objectives

Topic:

  • 1.2.1 definitions of the factors of production and their rewards
  • 1.2.2 mobility of the factors of production
  • 1.2.3 quantity and quality of the factors of production

Guidance

  • Definitions and examples of land, labour, capital and enterprise
  • Examples of the nature of each factor of production
  • The influences on the mobility of the various factors
  • The causes of changes in the quantity and quality of the various factors

Video Lectures

Note:

 

  • The video is  a preview of our revision notes
  • Note that notes get revised from time to time as per expert advice. 
  • All the IGCSE Economics Notes   are meant for revision and hence are fully downloadable as well as printable once you become a paid member.

Factors of Production and Their Rewards

Summary Fill in the Blanks

Click the highlighted blanks to reveal key definitions and ideas. Word choices are given in brackets where they help students identify the accepted term.

1 What are the factors of production?

The economic resources of land, labour, capital and enterprise are called the
________________ factors of production
.
These are the resources used to produce
________________ goods and services
.
The four factors are
________________ land, labour, capital and enterprise
.

2 Land

Land refers to all
________________ natural resources
used in production.
This includes resources such as oil, coal, water, plants and
________________ animals
.
Accepted words for this factor: (
________________ land / natural resources
)
The reward for land is
________________ rent
.

3 Labour

Labour means the
________________ human effort
used in producing goods and services.
This effort can be mental or
________________ physical
.
Accepted words for this factor: (
________________ labour / human effort
)
The reward for labour is
________________ wages
.

4 Capital

Capital refers to all
________________ man-made goods
used in production.
Capital is used to help produce other
________________ goods and services
.
Accepted words for this factor: (
________________ capital / man-made goods
)
The reward for capital is
________________ interest
.

5 Enterprise

Enterprise is the factor that involves
________________ risk-bearing
and key decision-making.
It is important because some business events cannot be
________________ anticipated
beforehand.
Accepted words for this factor: (
________________ enterprise / entrepreneur
)
The reward for enterprise is
________________ profit
.

6 Summary of factors and rewards

Land earns
________________ rent
, labour earns
________________ wages
, capital earns
________________ interest
and enterprise earns
________________ profit
.

You need to know:

(a) The four factors of production are land, labour, capital and enterprise.

(b) Land means natural resources used in production.

(c) Labour means human effort, whether mental or physical.

(d) Capital means man-made goods used to produce other goods and services.

(e) Enterprise involves risk-taking and decision-making in business.

(f) The rewards are rent for land, wages for labour, interest for capital and profit for enterprise.

Members Area

Unlock the complete range of solved past exam papers along with mock exams, revision notes, timed quizzes, interactive flipbooks and many more exam preparation resources.

Unlock Complete Resources
Next Previous