Lesson 3 Resources and Specialization

What do you think resources are? What kind of resources do you think that Colorado has? Any examples?? Can you think of resources that other countries might have? HINT: Think of the Independence lesson with yarn

Resource: The machines, workers, money, land, raw materials, and other things that a country can use to produce goods and services and to make its economy grow. Resources may be renewable or nonrenewable. Countries MUST use their resources wisely to ensure long-term prosperity

C = Capital E = Entrepreneurship L = Land L = Labor There are four different categories of resources: C = Capital E = Entrepreneurship E L = Land C L L = Labor L Turn with me to the WORDS TO KNOW selection in your Student Workbooks

CAPITAL Material Wealth The money, machines, factories, and tools used (or available for use) in the production of other goods and services. (ex. Mixing machine, cake pans, brick oven)

ENTREPRENEURSHIP The willingness to assume the risks of organizing and coordinating resources to produce goods and services. (ex:Mark Zuckerberg, JK Rowling, Walt Disney)

LAND Natural resources used to produce goods and services. EX: land, minerals, and trees.

LABOR All human effort, including the knowledge and skills used in the production of goods and services.

Different countries have different capital, entrepreneurship, land and labor resources.

Describe the capital, entrepreneurship, land and labor that goes into making a chocolate bar? What countries are involved?

Describe the capital, entrepreneurship, land and labor that goes into making a t-shirt: http://ww2.kqed.org/lowdown/2015/03/18/making-your-t-shirt-a-journey-around-the-world/

that they can most efficiently produce Specialization occurs when countries or businesses concentrate on producing only those goods and services that they can most efficiently produce given their existing resources.

Labor India is a good example of a country that has maximized its human resources by providing labor for call centers for the technology industry.

EXAMPLE: Imagine you want a sweater EXAMPLE: Imagine you want a sweater. After a little research, you discover that it will cost $50 to buy the necessary yarn, needles, and pattern to complete the job yourself. Additionally, it will take you at least 10 hours to create!! However, after a short trip to a local retail store you find a sweater already made and for only $25. Does it make more sense for you to knit the sweater yourself or to buy one pre-made from a store?

Should the United States focus on only products we specialize in and import all other goods? OR should we take care of our immediate needs first, such as food, clothing, shelter, and then trade specialized products only if there is resources left over? ?

Developing nations often lack the capital necessary to create more sophisticated goods that would generate greater wealth and facilitate trade. (Just like our cocoa example – countries in Africa and South America have the means to produce the cocoa beans but lack the ability to process the cocoa.

STUDENT WORKBOOK – Page 17-18. Turn to the STATS AROUND THE WORLD table pages in your STUDENT WORKBOOK – Page 17-18.

Let’s review and define the types of information and statistics found on the table…….Developing/Developed

LIFE EXPECTANCY The number of years a person is expected to live.

PER CAPITA INCOME The average amount of income for every person in a country; the total amount of everyone’s income divided by the population

GROSS DOMESTIC PRODUCT (GDP) The total market value of the good and services produced by a nation in a given time period.

GET INTO GROUPS OF TWO

Turn to Page 15 in your student workbook:

We will now create a class chart. What resources do DEVELOPED COUNTRIES have? What resources do DEVELOPING COUNTRIES have? **Create this list on two pieces of butcher paper / two sides of a chalkboard / or two different boards in the classroom.

How might these resources impact trade for Developed Countries? How might these resources impact trade for a Developing Country?

Many developing countries lack the capital to move away from producing traditional commodities (agricultural products, minerals, etc.). Their lack of capital also means that they have less of a voice when trying to influence trade regulation.

FACTS TO PONDER….. The 48 poorest countries account for less than 0.4% of all global exports. 48 countries 196 countries in the world = 24%

FACTS TO PONDER….. 6% of the world possesses 59% of the wealth in the world. 11 countries

FACTS TO PONDER….. 7% of the world owns a car.

FACTS TO PONDER….. Across the world…. 3.5 billion people live on less than $2.50 a day Aprox. CURRENT world population = 7.5 billion http://www.poodwaddle.com/worldclock/

FACTS TO PONDER….. Across the world…. 1.4 billion have no access to clean water

3 billion have no access to sanitation FACTS TO PONDER….. Across the world…. 3 billion have no access to sanitation

2 billion have no access to electricity. FACTS TO PONDER….. Across the world…. 2 billion have no access to electricity.

1.4 billion people are illiterate. FACTS TO PONDER….. 1.4 billion people are illiterate.

FACTS TO PONDER….. 20% of the population in the developed nations consumes 86% of the world’s goods.

How do you think developing countries will continue develop?

Will they be able to improve on their own or will they need help?

Is it the responsibility of other nations to assist these nations?

In the questions we just discussed…… There is NO RIGHT or NO WRONG answer. We just want you to begin thinking about the challenges developing countries face.