Micro

Factors of production

The factors of production are land, labour, capital and entrepreneurship, and their rewards are rent, wages, interest and profit.

CAPS

Grade 11 · Economics · Micro

Economics wants the concept, then the diagram or the data, then the consequence.

The papers
Paper 1 is macroeconomics and economic pursuits. Paper 2 is microeconomics and contemporary economic issues. Each paper is 150 marks.
How to write it
Define the term as CAPS uses it. If a graph is asked for, label both axes, the curves, and the equilibrium or the shift. Then say what happens to price, quantity, growth, inflation or unemployment. A curve with no labels does not explain.
How a marker reads it
A common mix-up is calling wages profit, when wages are paid to workers and profit is what is left for the person who took the risk.

Essays are marked on the introduction, a body that applies the theory, and a conclusion that answers the question. A list of definitions is not an argument.

Worked theory

Worked theory. A small broiler farmer outside Bronkhorstspruit rents land for R3 000 a month, and that payment is rent. She pays two workers R4 000 each, and those payments are wages. She borrowed R50 000 for cages and pays interest on the loan, and the cages are capital. She chooses the breed, the feed and the buyers, which is entrepreneurship. In a good month, after rent, wages, feed and interest, R7 000 is left, and that leftover is profit. In a bad month the leftover can be nothing.

More worked examples

Mamelodi taxi owner
A taxi in Mamelodi is capital, a produced vehicle used to earn fares. The driver's pay is wages. The owner who bought the taxi and carries the risk of empty seats is the entrepreneur, and money left after fuel, wages and the bank is profit. If the taxi was financed, the lender's reward is interest. Using a public road does not turn the owner into a landlord earning rent.
Zeerust beans and a plough
A household in Zeerust farms a plot it owns. If they leased that land to someone else, the payment would be rent. Their own work in the field is labour, and it would be wages if they hired a neighbour instead. A plough bought last year is capital. The decision to plant beans rather than leave the land idle is entrepreneurship, and folding all four rewards into one word, income, hides which factor was paid.

In ordinary words

Land means natural resources and earns rent, labour means human effort and earns wages, and capital means produced goods used to make other goods, such as machines and buildings, and earns interest. Entrepreneurship is the organising and risk-taking that combines the other three, and its reward is profit, what remains after the other rewards and costs are paid. Profit can be small or negative when the risk goes badly. Cash in a wallet is not the same thing as capital goods.

In South Africa

Broiler houses outside Bronkhorstspruit carry rent, wages and a loan on the same month's list of costs.

Part 1 / 4

What it is

The factors of production are land, labour, capital and entrepreneurship, and their rewards are rent, wages, interest and profit.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

Name the four factors of production and their rewards.

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: Name the four factors of production and their rewards.

In other words — as if you have never seen this before

If you have never seen this before: Each earns income. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

Factors of production.

3. Which method — and why this one?

Each earns income.

4. Step-by-step working

01 / 07
Step A — Read the question twice
Slow down. Circle the word that names the unknown. Underline every number and its unit. Do not grab a formula yet — first decide what the paper is actually asking.
Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.
02 / 07
Step B — Write the given in a column
Factors of production.
Why this step: A column with units stops you mixing cm with m, or minutes with seconds. Markers can also see you started correctly.
03 / 07
Step C — Name the method in words
Each earns income.
Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.
04 / 07
Identify the given
Land → rent; labour → wages; capital → interest; entrepreneurship → profit.
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
05 / 07
Step G — Sense-check the size
Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.
Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.
06 / 07
Step F — Box the answer with its unit
Rent, wages, interest, profit.
Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.
07 / 07
Step H — What the marker is looking for
On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.
Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

Rent, wages, interest, profit.

Copy onto your answer sheet — in this order

Answer: Rent, wages, interest, profit.

6. Check it like a marker

Entrepreneur combines the others.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

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