Capital: Both types of mobility of capital depend on the type of capital good. Some capital goods, like a computer or photocopier, can be transferred from one place to another, making them geographically mobile. Whereas a coal mine or a dock is geographically immobile, as it can’t possibly be displaced from its original place. They are also occupationally immobile, as a coal mine can’t be used for any purpose other than mining coal. But some capital goods, like a bus, are occupationally mobile as they can be used by a travel agency for tourists and also by a bookstore for delivering books.

Enterprise: Enterprise is the most geographically and occupationally mobile FOP. The skills of an entrepreneur can be used in countless industries, and they can move wherever they want according to their will. But the mobility of the enterprise is subject to the entrepreneur.

Quantity and Quality of FOPs

Land: The amount of land does not change, but a few exceptions can increase or decrease the quantity of land. Soil erosion may decrease the amount of land, whereas land reclamation through wars and other means can increase its supply. The quality of land can be increased by using fertilisers or purifying rivers.

Labour: The quantity of labour can be increased by a number of factors:

• The size of the population – The larger the population, the more workers there are likely to be.

  
  

• The age structure of the population – A country with a high proportion of people of working age will have more workers than a country with the same population size but a higher proportion of people who would be too young or too elderly to work.

  
  

• The retirement age – The higher the retirement age, the more potential workers there will be.

  
  

• The school leaving age – Raising the school leaving age would reduce the number of workers.

  
  

• Attitude to working women – Countries where it is acceptable for women to work have more workers to draw on.

  
  

Those people who are working and those seeking work form the labour force. This is also known as the workforce or working population. Those of working age are people between the school leaving age and the retirement age.

The quality of labour can be increased by providing better education, better training, and better healthcare. More can be produced with the same number of workers if the workers become more skilled. If a worker is more fit, they are less likely to get sick and more likely to work longer hours and more efficiently. An increase in productivity, including labour productivity, is a major cause of an increase in a country’s output.

Capital: The quantity of capital can be increased by investment. Every year, some capital goods become obsolete but are soon replaced by fresh capital goods. The total value of the output of capital goods produced is referred to as gross investment. Some of the capital goods being produced will be replacing those that have worn out or become obsolete. The value of replacement capital is called depreciation or capital consumption. Net investment is the value of the extra capital goods made. It is equal to gross investment minus depreciation. Occasionally, gross investment may be lower than depreciation. This means that some of the capital goods taken out of use are not replaced. This is said to be a negative net investment.

The quality of capital can be increased by advances in technology. This allows capital goods to produce better and more output.

Enterprise: The quantity of enterprise can be increased by better education and encouraging students to pursue a degree in economics or business studies. Lower corporate tax (taxes on firms’ profits) and a reduction in government regulations can also increase the number of entrepreneurs, as it may attract people to open a business and earn more than a job can give. Some immigrants may become entrepreneurs as they have left their home in search of a better life.

The quality of enterprise can increase through better education, better training, better healthcare, and more experience. More experience in particular can highly increase the quality.

Payment for FOPs

• Land – Rent

• Labour – Wages

• Capital – Interest

• Enterprise – Profit