Land, Labour, Capital, and Enterprise.

Natural resources like water, minerals, or forests.

It includes human effort, skills, and expertise used to produce goods and services.

Man-made resources like machinery, tools, and buildings used in production.

It involves organizing the other factors of production and taking risks to create goods and services.

Primary, Secondary, Tertiary, and Quaternary.

Primary sector

The amount of output produced per unit of input.

Productivity = total output ÷ total input.

Splitting the production process into specialized tasks to improve efficiency.

Increases efficiency and improves product quality.

Work may become monotonous, and over-reliance on certain workers can disrupt production.

Costs that do not change with output, such as rent and salaries.

Costs that change with output, such as raw materials and wages.

Total Costs = Fixed Costs + Variable Costs.

Total Revenue = Price × Quantity Sold.

Profit = Total Revenue - Total Costs.

Cost savings achieved as production increases.

Internal economies occur within a firm (e.g., bulk buying), while external economies arise from industry growth (e.g., improved infrastructure).

Cost disadvantages when a firm grows too large.

Many buyers and sellers, easy entry and exit, and lots of information is available.

They accept the market price because competition prevents them from setting higher prices.

They are driven to normal levels due to competition.

They benefit from economies of scale, reducing costs.

They may suffer from diseconomies of scale, such as poor communication.

They are more flexible and adaptable to market changes.

They have limited access to capital and higher costs.

Single seller, high barriers to entry, and price-making power.

They can invest in innovation due to high profits.

They charge higher prices due to lack of competition.

Few dominant firms, interdependence, and high barriers to entry.

Through non-price competition like advertising and branding.

Firms continuously lower prices, reducing profits for all.

Firms hire workers based on the demand for goods and services.

Population size, skills, and wage rates.

Where the demand for labor equals the supply of labor.

Higher wages and more employment.

Lower wages and more employment.

They negotiate wages and working conditions for workers.

To correct market failures and promote fairness.

To reduce negative externalities, such as pollution.

To encourage positive externalities, such as renewable energy use.

A maximum price set by the government, such as rent controls.

A minimum price set by the government, such as the minimum wage.