Extract 1: Seabridge electric ferry service
Seabridge Council wants to reduce road congestion and improve transport links to a nearby island community. It has awarded HarbourLink Ltd a five-year contract to operate an electric ferry service. The council will provide access to its pier, make an annual payment to the business and set a maximum passenger fare.
HarbourLink Ltd's owners will invest their own money in the project. The business will employ crew members, mechanics and office staff. It will buy two electric ferries, charging equipment and a digital ticketing system. The council will review the contract after two years, taking account of passenger numbers, reliability and value for money.
Table 1 shows information about the proposed ferry service.
| Measure | Information |
|---|---|
| Annual council payment | £800,000 |
| Maximum passenger fare | £4.00 |
| Owners' investment | £500,000 |
| Workers employed | 26 |
| Forecast passenger journeys in year 1 | 210,000 |
Using Extract 1, explain what is meant by enterprise as a factor of production.
Identify two examples of capital used by HarbourLink Ltd.
Analyse how HarbourLink Ltd combines the four factors of production to provide the ferry service.
Explain one role of consumers in the proposed ferry market.
Explain one way HarbourLink Ltd depends on Seabridge Council.
Using the information in Extract 1 and your own knowledge, evaluate the interdependence of consumers, HarbourLink Ltd and Seabridge Council in the proposed ferry market.
29 exam-style questions on OCR GCSE Economics 1.1 Main economic groups and factors of production, covering 1.1.1 Role of main economic groups and 1.1.2 Factors of production. Each one has a worked solution and a mark scheme showing where the marks go.