Question

1.      Describe the five factors of production. What two factors of production create wealth for society? Include examples in your responses.

2.      Which of the environmental factors might have the most significant impact on businesses? How?

3.      Describe the differences between fiscal and monetary policy? Include current examples in your explanation.

4.      What are the four degrees of competition, and what are some examples of each?

Answer 1

1. FIVE FACTOR OF PRODUCTION

• Land
• Labor
• Capital
• Entrepreneurship
• Ownership of Factors of Production

TWO FACTOR OF PRODUCTION CREATE WEALTH FOR SOCIETY

Land refers to all or any the natural resources. These resources are gifts that are given naturally. Some common samples of natural resources are water, oil, copper, gas, coal, and forests.These resources are often renewable, like forests, or non renewable like oil or gas. The financial gain attained from land or different such natural resources is termed rent.

Labor, as an element of production, involves any human input. the standard of labor depends on the workforce’s skills, education, and motivation. Generally speaking, the upper the standard of labor, the a lot of productive is that the manpower.If somebody has ever paid you for employment, you've got contributed resource to the assembly of products or services. Labor are often physical or mental. The financial gain attained by resource is termed wages. it's the most important supply of financial gain for many individuals.

2. Environmental Factors affecting Business

Environmental Policies. Environmental policies are another external issue which will impact the strategy of a business. Environmental policy is that the commitment of a business to the laws, laws likewise as different policy mechanisms that are involved with environmental problems. Environmental policy impacts businesses as a result of the law implies organizations to alter their operational procedures and instrumentation therefore on meet those standards which may price businesses some smart quantity of cash.

Climate change. global climate change became AN insidious threat to businesses as its pace are often recognized only it's taken into thought on the idea of decade-after-decade. Increasing issue of world warming and adverse climate within the recent few years, it's tough for corporations and organizations to control equally in each type of atmospheric condition

Pollution. Pollution can even have an effect over business ways. Pollution could cause some major environmental events which may end in the disruption of provide chains or a rise within the price of material. Organizations ought to monitor such events and develop contingency plans thus on deal with them.

3. DIFFERENCE BETWEEN FISCAL AND MONETARY POLICY
The economic position of a country will be monitored, controlled and regulated by the sound economic policies. The fiscal and monetary policies of the state area unit the 2 measures, which may facilitate in transfer stability and developing smoothly.

Monetary Policy

• is the policy to regulate and control money supply and credit in the economy.
• is carried out by the central bank of the country.
• makes use of tools such as bank rate, SLR, open market operations etc.
• functions include controlling money establishments, influencing price and available of credit, controlling inflation and sale and get of paper assets.
• As an example, say, inflation target is of four wheel drive. However, with the type of economic process that's happening, if inflation is expected to surpass this figure, central bank would increase the rate of interest to induce people to save additional and pay less which might management the rate of inflation.

Fiscal Policy

• involves government changing tax rates and level of government spending to influence aggregate demand within the economy.
• is administered by government of the economy.
• Main tools used are government spending and charge per unit.
• primary functions include looking once stabilisation of economy, financial gain distribution between completely different segments, development etc.
• Say, government is planning to increase aggregate demand within the economy in regards to its target of higher economic process.

4.FOUR DEGREES OF COMPETITION

The four degrees of competition include perfect competition, monopolistic competition, oligopoly, and monopoly.

In perfect competition, all corporations in an business area unit little however the quantity of corporations within the business is massive. No single firm is powerful enough to influence price; thus, value is set by such economic process as offer and demand. The product during a utterly competitive market area unit thus similar that patrons read them as similar to those of different corporations

In monopolistic competition, there area unit several buyers and sellers. Often, sellers arrange to differentiate their product and services from others through design, styling, advertising, or the employment of brand name names; this usually provides sellers some management over costs. Monopolistic competitive businesses face few market entry/exit barriers.
Examples of monopolistic competition markets are
beauty salons and spas
and tutoring companies.

oligopoly
In an marketplace, an business has only some of sellers, who are generally quite massive. Market entry is difficult as a result of massive capital outlays are required for brand new start-ups. In an marketplace, the actions of 1 firm tend to have an effect on the actions of all firms; as an example, once one firm changes value, all corporations tend to vary value rather quickly.

A monopoly exists once an business or market has only one producer that dominates the complete market. although monopolies are illegal within the U.S., natural monopolies such as utilities companies are government-regulated; they're allowed to exist since one such company will usually with efficiency offer all required product or services.