Success criteria to remember all the FOPs:

1. What types of resource? (natural, human or manmade resources)
2. What it consists/includes/definition
3. Rewards (Rent, wages, Interest or profit)
4. Example: Give representations and real life examples of each FOP

• Land: It is a natural resource. It is a free gift of nature. It includes everything which is available on, above and under the surface of the earth. Reward for land is rent.
  • Example: farms, rivers, sunlight, etc.
• Labour: It is a human resource. It comprises the physical and mental efforts put for the production of goods and services with the intention of earning a reward. Reward for labour is wages or salary.
  • Example: nurses, teachers, doctors, etc.
• Capital: It is a man-made resource. It include anything which is required for further production of goods and services. Reward for capital is interest.
  • Example: machinery, raw materials, tools, etc.
• Enterprise: It is a human resource. It includes the risk taking ability and decision making skills. This combines all the other 3 factors of production. Reward for enterprise is profits.
  • Example: owner, sole proprietor, entrepreneur, etc.

• Note: Only mobility of labour is examinable for 2027 — mobility of land, capital and enterprise has been removed from the syllabus.
• Occupationally mobile labour: workers who can move easily between different types of jobs, e.g. a shop assistant retraining as a data-entry clerk.
• Occupationally immobile labour: workers who find it difficult to switch job types, e.g. a heart surgeon cannot easily become an airline pilot without years of retraining.
• Geographically mobile labour: workers who can move easily to a different location for work.
• Geographically immobile labour: workers who find it difficult to relocate, e.g. due to family ties, high housing costs, or immigration restrictions.

• Demand for a factor of production — especially labour — is a derived demand: it arises from the demand for the good or service it helps produce, e.g. demand for airline pilots depends on demand for air travel. This idea underpins wage determination, covered in the Workers topic.

• Airline Industry
  • Land: Air, Aluminium, Crude Oil
  • Labour: Pilot, Flight Attendants
  • Capital: Runway, Airplane
  • Enterprise: Owner of Airline Company, CEO

• School
  • Land: Place where school is built
  • Labour: Teachers, Nurses
  • Capital: School Building, Sports Ground
  • Enterprise: Trustees, Principal, Directors

• Google
  • Land: Aluminium, Silicon, Place where factories are built
  • Labour: Engineers, Designers
  • Capital: Robots, Machines, Factories
  • Enterprise:Larry Page, Sundar Pichai

• Explain, giving examples, two factors of production used in the tourism industry. (4 marks)
  • Labour which is human effort (1) e.g. tourist guides (1).
  • Land which is natural resources (1) e.g. beaches (1).
  • Capital which is human-made goods and services used in production (1) e.g. hotels (1).
  • Enterprise which is risk bearing and decision making (1) e.g. may be undertaken by the owner of a hotel (1).
• What is the difference between labour and enterprise? (4 marks)
  • Land is a natural resource (1) whilst labour is human resources/workers (1).
  • The payment for land is rent (1) whilst the payment for labour is wages (1).
  • Land is geographically immobile (1) whilst there is some limited geographical mobility in the case of labour (1).
• What is the difference between labour and enterprise? (4 marks)
  • Up to 2 marks for the diagram:
    • Labour is human/effort/workers’ services (1) whilst enterprise is the ability and willingness to bear uncertain risks/organise other factors of production (1).
  • Up to 2 marks for the diagram:
    • The reward for labour is wages [1], whereas the reward for enterprise is profit [1].
    • Enterprise tends to be more geographically or occupationally mobile than labour [2].
• Explain whether land is mobile. (4 marks)
  • Most land is geographically immobile (1) fixed in one place / cannot move from one place to another place (1).
  • Some forms of land e.g. wildlife can be moved from one place to another (1).
  • Land is occupationally mobile (1) capable of changing its use / e.g. land can be used for farming or housing (1).
• Define enterprise. (4 marks)
  • Risk bearing (1).
  • Setting up / owning a business (1).
  • Key decision making / organisation of the other factors of production (1).
  • Profit incentive / profit is the reward (1)..
• Explain two advantages of an increase in the occupational mobility of labour. (4 marks)
  • Lower unemployment / increase employment (1) workers losing one job will find another job more quickly / find another job more easily / maybe more skilled / reduce frictional unemployment / reduce structural unemployment (1).
  • Higher output / higher GDP / economic growth (1) firms experiencing higher demand will be able to expand more quickly / more elastic supply / quicker adjustment to changes in market conditions / workers may be able to multitask / change roles / may be more skilled / fewer unfilled vacancies / greater use of resources / fewer idle resources (1).
• Explain one reason why the quantity of land may increase and one reason why the quality of land may increase. (4 marks)
  • Quantity of land- Reclamation (1) creating land from the sea (1). Reduction in overfishing / hunting (1) restoring stocks of fish / wildlife (1). Reduction in flooding (1) avoiding soil erosion (1). Discovery of new natural resources (1) e.g. of oil (1).
  • Quality of land- Use of fertilisers (1) raising productivity / efficiency / fertility of land (1). Reduction in pollution (1) preventing damage / diseases (1). Good weather (1) raising productivity / efficiency / fertility of land (1). Better equipment / more advanced technology (1) raising productivity / efficiency / fertility of land (1).
• Using appropriate examples, describe the four factors of production. (6 marks)
  • Land: natural resources/gifts of nature available for production, e.g. farmland.
  • Labour: all physical and mental effort of workers, e.g. teacher.
  • Capital: all man-made goods used in production, e.g. machinery.
  • Enterprise: the risk bearing and decision making function, e.g. entrepreneur or example of a function
  • Note: maximum of 6 marks.
• Analyse the factors that influence how easily labour can move between jobs and locations. (6 marks)
  • Occupational mobility is influenced by workers' skills and qualifications — highly specialised workers, such as surgeons, find it harder to switch to unrelated occupations without lengthy retraining, while workers with more general or transferable skills can move between jobs more easily. Access to training and education also matters: where retraining opportunities are widely available and affordable, workers can more easily acquire the skills needed for a new occupation. Geographical mobility is influenced by family and social ties, since workers with dependents nearby may be reluctant to relocate; by housing costs, since a large gap between house prices in different regions can prevent workers from moving to where jobs are available; and by immigration rules, which can restrict the international movement of labour. Trade union restrictions and professional licensing requirements (e.g. needing a specific local qualification to practise) can further reduce mobility by creating additional barriers to entry.