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Class 8 Factors of Production: cheat sheet
CBSE Social Science. The four factors of production (land, labour, capital and entrepreneurship), human capital, interest and dividends, supply chains and Corporate Social Responsibility.
Key ideas
- Production needs land (all natural resources), labour (physical and mental effort), capital (machines, tools, buildings, money) and entrepreneurship, with technology helping.
- Entrepreneurship is starting a new enterprise and taking risks to solve a problem; a startup aims to grow quickly using technology.
- Human capital is the skills and knowledge of workers, built by education, training and healthcare.
- Labour-intensive production relies on workers; capital-intensive production relies on machines.
- Borrowers pay interest to lenders; companies pay dividends to shareholders from profits.
- A supply chain is the network of people, firms and resources that make and sell a product.
- Corporate Social Responsibility means businesses also contribute to society and the environment.
Remember
| Four factors | land, labour, capital, entrepreneurship |
| Interest | paid by a borrower to a lender |
| Dividend | paid by a company to shareholders |
| Kaizen | Japanese idea of continuous improvement |
| CSR law | 2014: 2% of average profit |
| Average | sum of the values ÷ how many there are |
| India’s first airline | started by J. R. D. Tata in 1932 |
Watch out
- Thinking land means only soil: it is all natural resources.
- Mixing up interest (on a loan) and a dividend (from profits).
- Taking 2% of one year’s profit instead of the average.
Worked example
A company’s profits were ₹430 crore, ₹540 crore and ₹530 crore. (a) What is the average? (b) How much must it spend on CSR at 2%? (c) Suggest two good uses for CSR money.
Working: (430 + 540 + 530) ÷ 3; 2% of that
Answer: (a) ₹500 crore (b) ₹10 crore (c) Schools, health camps, clean water or planting trees.
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