Resources needed to produce goods and services. LEQ Key Terms Land Labor Capital Entrepreneurship Wages Rents Interest Profit How does technology differ from capital as a factor of production? Factors of Production Resources needed to produce goods and services.

Types of Societal Resources Like individuals, societies cannot satisfy all their wants. All societies (in all countries) have limited resources. These resources are typically categorized into four groupings: land, labor, capital, and entrepreneurship.

Production

Labor is the human resource. Labor refers to the mental and physical efforts applied to the production of goods and services. Payments for labor services are called wages.

LAND Land is the environmental resource. Land includes all natural resources, land (including anything that grows on or below the land, water, air, and wildlife. Payments for the use of land are called rents.

Nonrenewable Resources An renewable resource is one that can be replaced, either naturally or by man. A nonrenewable resource is one that cannot be replaced in a timely manner or at all by nature or by man. Let’s Practice Renewable Resources Nonrenewable Resources

CAPITAL Capital is the physical improvement resource. Capital refers to all relatively permanent improvements made to land. Capital includes buildings, sidewalks, utilities that are installed, and all the machinery and equipment that is used to make the improvements. Another type of capital is financial capital, which includes money, stocks, bonds, and deeds to land. Payment for all capital is called interest.

ENTREPRENEURSHIP Entrepreneurship is the risk-taking resource. Entrepreneurs make things happen. They are the people who combine labor, land, and capital to start businesses. However, not every business is successful. As a matter of fact, more new businesses fail than survive. Payment for risk-taking or entrepreneurship is called profit.

Name That Resource Land Capital Capital Land Entrepreneur

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Factors of Production Activity Work with your partner to design and create a collage that displays examples of the factors of production. You may use the chart below as a reference. Land Natural resources Labor Anyone who works and the work they do. Capital Property used to make other goods and services. Entrepreneurship Individual’s ability to start new businesses and take risks with financial capital. You may clip photograph, ads, and articles or create artwork of your own. You must not have any white paper showing and each example should be unique. Don’t forget the title and labels to identify the factors of production.