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Factors of Production The creation of factories
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Factors of production n Resources used for production n Types:
n Land n Capital n Labour n Entreprenuership
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Land n Natural resources n Characteristics
n A gift of nature n Limited in supply n Land is immovable n The supply of land involves no opportunity
cost
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Capital n Man-made resources used for further
production n Examples: machines, raw materials, tools n Features:
n Man made
n It raises the productivity of other factors
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Land or Capital? n Ice at Mount Everest n Ice in a skiing field n Sea water n Sea water in a seafood restaurant n Sharks in the Atlantic Ocean n Sharks at the Ocean Park
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Human Resources
n Labour
n Entreprenuership
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Labour Supply n Measured in terms of time (man hour) n Labour supply = no. of workers x no. of
working hours per worker
n The Labour Supply Curve
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Labour Supply n Measured in terms of time (man hour)
n Labour supply = no. of workers x no. of working hours per worker
n Factors affecting labour supply: n Size of population n Size of working population n No. of working hours
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Before factories? n Self sufficient population n 79% English population lived in rural or
agrarian society
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Advent of factories… n Creation of large cities n Specialization
n Trade n Large cities took time to develop
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New sweater, before factories? n Merchant
n Travels around looking for extra sweaters to sell
n Labour intensive, unique and not very resource efficient nor labour efficient
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Terms n Labour intensive: a lot of time to produce
something that could be produced in a less time consuming and more efficient method
n Resource efficient: being able to manage your resources (4 factors) to maximise production of your good => product maximisation
n Labour efficient: maximising the output of production of labour => product maximisation
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Along came the entrepreneur…
+ =
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What are we lacking? 1. Land 2. Labour 3. Entrepreneurship 4. ?
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Capital n The last and most important item
n Man made products
n Before we look at capital though…
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Supply & Demand n More is less n Shortage So how do you overcome this shortage?
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You use capital! n The creation of man-made objects to
improve or make your production more efficient.
SR Type Tray Sealing Machine (commonly found in supermarkets)
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Where to put the factory? n Easy to gather all factors of production n Access to energy to run the capital
n Water and steam n Labour n Land (access to raw materials)
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Map p614 n What does it show us about how England
developed? n Where is most of the energy? n What are most of the cities located near? Why? n Why are ports, railroads and canals important to
the creation of the factory and the development of the city?
n Do you notice some areas are far emptier of cities, such as North Scotland and Wales. Why might that be the case?
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Your task (formative) n Look up many of the inventions that
improved the production of goods in the Industrial Revolution.
n Pp614-619 & pp652 – 655 n How did the inventions change (improve)
the production process?
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How to increase labour supply? n é population growth (by natural growth or
immigration) n é monetary rewards n é import of labour from other countries n é retirement age (e.g. from 60 to 70) n ê school leaving age (e.g. from 16 to 17)
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Labour productivity n Measured in terms of output per unit of
labour