Costs of Production Lesson Introduction to Economics Students will identify the costs of production; profit and loss, and total revenue

Bell Work Read to yourself the information on the handout. Be prepared to share out

The Invention Convention Key Vocabulary: Profit Loss Revenue (Total) Costs of Production

Revenue – total costs = Profit Profit- is the total revenue minus total costs Revenue – total costs = Profit $5,000 – $2,000 = $3,000

Revenue – total costs = Profit Loss Loss-if total costs exceeds revenue creating a negative figure which means a loss. Revenue – total costs = Profit $2,000 – $5,000 = $3,000

Selling Price X Quantity Sold = Total Revenue Revenue (Total)-a products selling price multiplied by the quantity sold Selling Price X Quantity Sold = Total Revenue $5.00 X 5 = $25.00

Costs of Production Costs of Production- average per unit cost multiplied by the quantity produced Calculate the total cost of each resource used by price per unit X number of units used. This will give you the Total Resource Cost Add up ALL of the Total resource costs This will equal your TOTAL Invention Cost for One Unit Rent = .75 X 1 = $.75 Labor= .25 X 2 = $.50 Total = $1.25

Resource Price List

Each group will present their new inventions to the class Presentations Each group will present their new inventions to the class

Calculating Profit 1. Fill in column 1 with the Invention Name and column 2 with the total Quantity sold Your group will need to do the following: 2. Calculate how many units sold? 3. Calculate the Total Revenue? 4. Calculate the Total Cost? 5. Calculate the Total Profit or Loss?

Which Business had the highest Profit WHO?????? Yeah!!!!!!!

Why did they have the highest profit?

Closure What resources do producers need to produce goods and services?

natural resources, human resources and capital resources