Introduction

In this topic you will learn the definitions of the factors of production, namely land, labour, capital and enterprise and the rewards for these factors. We will explore the division of labour and specialisation which was first discussed by Adam Smith in the 18^th century when he described the production of pins in factories. We conclude with the key factor of the entrepreneur.

Task

Economics in Context

Read the article on James Dyson, the well-known global entrepreneur, on page 16 of the textbook and write responses to the questions posed.
Suggested answers can be found in the digital textbook and in General Resources.

Watch

Now watch these videos and make notes.
The first video explains the four factors of production, namely, land, labour, capital and entrepreneur:

WATCH – The Four Factors of Production (YouTube)

The second video describes the meaning of division of labour and the advantages and disadvantages:

WATCH – The Division of Labour (YouTube)

Read and Make Notes

Read and supplement your notes from the following sections of the textbook on pages 16 to 20:

- 3.1 The factors of production;
- 3.2 The difference between human capital and physical capital;
- 3.3 Specialisation and the division of labour;
- 3.4 The role of the entrepreneur.

Glossary

Highlight any new terminology on your glossary.

Task

Think Like an Economist

Read and complete the ‘Think like an Economist’ task on page 21 of the textbook. Research a selection of these entrepreneurs and see how they match the qualities listed on page 20.
Suggested answers can be found in the digital textbook and in General Resources.

Consolidate

Now try the exam-style questions on pages 21 and 22 of the textbook.
Suggested answers can be found in the digital textbook and in General Resources.

Reflect

Draw up a table like the one on page 22 of the textbook and complete the self-evaluation.
If there are any areas about which you are unsure, please go back over your notes, the textbook and the resources listed in this topic before moving on.