Factors of Production The creation of factories

Factors of production n  Resources used for production n  Types:

n  Land n  Capital n  Labour n  Entreprenuership

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

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

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

Human Resources

n  Labour

n  Entreprenuership

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

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

Before factories? n  Self sufficient population n  79% English population lived in rural or

agrarian society

Advent of factories… n  Creation of large cities n  Specialization

n  Trade n  Large cities took time to develop

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

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

Along came the entrepreneur…

+ =

What are we lacking? 1.  Land 2.  Labour 3.  Entrepreneurship 4.  ?

Capital n  The last and most important item

n  Man made products

n  Before we look at capital though…

Supply & Demand n  More is less n  Shortage So how do you overcome this shortage?

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)

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)

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?

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?

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)

Labour productivity n  Measured in terms of output per unit of

labour