In this topic you will study the following:

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For this topic you will need to work through pages 100 to 105 in your course book.

Key Points

Please pay attention to what makes up the four factors of production, which are the inputs used by businesses to produce goods and services sold to consumers.
You will need to understand the concept of derived demand for these factors, as well as the different way that they can be combined.
In addition, you will learn that there is normally a choice between production mainly using people (labour intensive) and mainly using machines (capital intensive) as machines are normally referred to as capital goods.
Finally, you will also learn what production means and how efficiency can be judged in terms of different measurements of productivity.