In your Interactive Notebook: Unit.Day 5.2 Factors of Production ON YOUR DESK: 1) laptop (warming up) 2) Interactive NB 3) (Completed) Study guide WARM UP If you want to make a sweater, what do you need and what do you have to do? Today’s Agenda Warm up & review Factors of Production Group Activity Circular flow simulation Study Guide or ACES (EC) End of Class Quiz Today’s OBJECTIVE(S): WRITE DOWN: I can identify and cite examples of each factor of production I can describe how money circulates in the economy between producers and consumers

Updates & Deadlines: (use assignment log!!!) Daily: Study Guide Completion 12/10: Opportunity Cost Scenarios 12/11: Factors of Production Cartoon/Diagram 12/12: Break Even Point Worksheet 12/13: Personal Budget activity (mini-project grade) 12/13: ACES Parapraph: What does it mean to be financially responsible? 12/13: Quiz 12/16: ACES Paragraph: What effect does educational achievement have on career choice and income? 12/17: ACES Paragraph: How do credit scores affect interest rates?

Scarcity All of economics is based on the problem of scarcity There are not enough resources for everyone Wants are unlimited, resources are not

Scarcity forces us to make choices: BASIC ECONOMIC QUESTIONS: What to produce How to produce it For whom to produce it Who gets what and how much? Who answers these questions? - Enter politics….

What goes into your pencil?

Factors of Production CELL: Capital Entrepreneurship Land Labor

Factors of Production: http://www.youtube.com/watch?v=K8kZP4dRe3w Identify each factor of production in the video clip

Capital When wealth is used to create more wealth Goods used to make other goods and services Machines, buildings, and tools can be used to make other things

Capital

Capital Goods vs. Consumer Goods Used to make other goods Consumer goods Final products that can be sold or used directly

Entrepreneurship Taking the initiative to start a business Requires having a business plan to succeed Must be willing to take risks Thinks big

Land Natural resources Anything not made by human beings Trees Cotton Water Iron

Land + Labor = Wealth Wealth created when human labor adds value to natural resources

Labor Human resources anything that someone does (mental or physical) to produce a good or a service Picking crops Designing a microchip Bringing a meal to a table

Examples of wealth Can be for sale, or for personal use Turning trees into pencils Taking a pencil and drawing something

Groups of Three Create a production plan for one of the following products: A Big Mac, a car, a chair, a book Create a cartoon strip or diagram that shows each factor of production required to create your product: Capital, Entrepreneurship, Land, and Labor Alternative Option: write a rap or poem that applies each factor of production

Circular flow model Money circulates in the economy, moving back and forth between producers and consumers:

Circular Flow Economic Model Quick Write: What do companies get from people? What do people get from companies?

End of Class Quiz Name the four factors of production Where do companies like McDonalds get their money from? How does consumer choice influence companies?

Extra Credit Write ACECECECES paragraph: QUESTION: What are the factors of production required to make a Big Mac? A – The factors of production required to make a Big Mac are…capital, entrepreneusrhip, land and labor. C – An example of capital in making a big mac is… Explain C – An example of entrepreneurship in making a big mac is… C – The land and resources required to make a Big Mac are… C – The labor required to make a big mac involves…