Economic Resources (Factors of Production)

    OCR
    GCSE

    The study of Economic Resources focuses on the classification and utilization of the four Factors of Production: Land, Labour, Capital, and Enterprise. Candidates must analyze the fundamental economic problem of scarcity relative to infinite wants, necessitating choices regarding resource allocation. Mastery requires understanding the characteristics of each factor, their respective rewards (Rent, Wages, Interest, Profit), and the implications of factor mobility and productivity on the Production Possibility Frontier (PPF).

    5
    Objectives
    4
    Exam Tips
    3
    Pitfalls
    4
    Key Terms
    4
    Mark Points

    Learning Objectives

    What you need to know and understand

    • Land: Natural resources, reward is Rent
    • Labour: Human physical/mental effort, reward is Wages
    • Capital: Man-made aids to production, reward is Interest
    • Enterprise: Risk taker and organiser, reward is Profit
    • Factor Mobility: The ease with which factors can move between uses or locations

    Marking Points

    Key points examiners look for in your answers

    • Award marks for explicit definitions: Land includes all natural resources (e.g., oil, fish), not just physical territory.
    • Credit responses that distinguish Capital (man-made aids to production) from financial capital (money).
    • Candidates must link Enterprise to the dual functions of organizing the other factors and risk-taking.
    • Analysis must demonstrate the impact of factor mobility (occupational and geographical) on productive efficiency.

    Examiner Tips

    Expert advice for maximising your marks

    • 💡When given a case study, explicitly quote the text to identify which specific factor is being referred to (e.g., 'the delivery van' as Capital).
    • 💡Ensure the distinction between 'Capital Goods' (used to produce) and 'Consumer Goods' (used to satisfy wants) is clear in analysis.
    • 💡For 'Evaluate' questions regarding factor substitution (e.g., machinery replacing labour), consider both short-term costs and long-term efficiency.
    • 💡Always pair the factor with its correct reward when describing income distribution.

    Common Mistakes

    Pitfalls to avoid in your exam answers

    • Defining 'Capital' as money or investment rather than physical assets like machinery or infrastructure.
    • Limiting 'Land' to agricultural plots rather than including raw materials like oil, fish, or timber.
    • Failing to identify the specific reward for Enterprise (Profit) distinct from Labour (Wages).

    Study Guide Available

    Comprehensive revision notes & examples

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    Key Terminology

    Essential terms to know

    Likely Command Words

    How questions on this topic are typically asked

    State
    Explain
    Analyse
    Calculate
    Evaluate
    Discuss

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