Economics 0455 · IGCSE · The factors of production
The factors of production — practice question
Over the last few years, the amount of Latvia’s factors of production has altered. Since 2008, capital has risen and land has stayed broadly unchanged, whereas the labour force and enterprise have both fallen. Enterprise and supply conditions can influence the prices firms charge. In 2022, the Latvian Government raised the country’s national minimum wage (NMW). Even so, its NMW still remained among the lowest in the European Union.
(a)[2]
Identify the rewards paid for capital and land.
(b)[4]
Explain two causes of a decline in enterprise in an economy.
(c)[6]
Analyse the ways in which changes in conditions of supply may affect a firm’s prices.
(d)[8]
Discuss whether a rise in a national minimum wage will or will not harm an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Interest, as the reward to capital” …