Chapter 3: Transforming Resources Into Goods And Services

1. What are the 4 factors of production?

Labor, goods, profit, innovation

Water, air, sunlight, fuel

Land, labour, capital and enterprise/entrepreneurship.

Technology, resources, output, management

The 4 factors of production are land (natural resources), labor (human efforts), capital (machinery, equipment), and enterprise/entrepreneurship (combining other factors to produce goods and services).

Explanation

The 4 factors of production are land (natural resources), labor (human efforts), capital (machinery, equipment), and enterprise/entrepreneurship (combining other factors to produce goods and services).

2. Draw a labelled diagram to show the transformation of inputs into outputs.

Inputs → Transformation Process ← Outputs

Inputs → Transformation Process → Outputs →

Inputs ← Transformation Process → Outputs

Inputs > Transformation Process > Outputs

3. Distinguish between the primary, secondary and tertiary sectors.

Primary: Extract raw materials from the land e.g. lumberjacks.Secondary: Turns the raw materials into a finished product e.g. furniture manufacturer.Tertiary: Sells the finished product or provides a service.

Primary: Growing fruits and vegetables. Secondary: Building infrastructure. Tertiary: Manufacturing electronics.

Primary: Manufacturing final products from raw materials. Secondary: Providing services directly to consumers. Tertiary: Extracting resources from nature.

Primary: Selling finished products directly to consumers. Secondary: Extracting minerals from the ground. Tertiary: Processing data and information.

The primary sector involves the extraction of raw materials, the secondary sector processes these raw materials into finished products, and the tertiary sector involves selling the finished products or providing services. The incorrect answers provided do not accurately describe the distinctions between these sectors.

Explanation

The primary sector involves the extraction of raw materials, the secondary sector processes these raw materials into finished products, and the tertiary sector involves selling the finished products or providing services. The incorrect answers provided do not accurately describe the distinctions between these sectors.

4. Why is the tertiary sector the largest of all?

As people become more affluent, they want more manufactured products and as their wealth increases further, they want more services.

The tertiary sector requires the least amount of resources compared to other sectors.

The tertiary sector is the smallest in terms of employment opportunities.

The tertiary sector is the oldest sector historically.

5. What is the difference between added value and adding value?

Added value = Cost of production - price of finished product. Adding value = the price at which the product is sold.

Added value = Modifying a product to increase its worth. Adding value = Price of finished product - cost of production.

Added value = Price of finished product + cost of production. Adding value = increasing the price of a product.

Added value = Price of finished product - cost of production.Adding value = modifying a product to increase it's worth.

The correct difference between added value and adding value is that added value is calculated by subtracting the cost of production from the price of the finished product, while adding value involves modifying a product to increase its worth. The incorrect answers provide inaccurate definitions or misunderstand the concepts involved.

Explanation

The correct difference between added value and adding value is that added value is calculated by subtracting the cost of production from the price of the finished product, while adding value involves modifying a product to increase its worth. The incorrect answers provide inaccurate definitions or misunderstand the concepts involved.