Economics and Personal Finance Unit 1 Resources for Production

Productive Resources Productive resources are the natural resources, human resources, capital goods and entrepreneurial skills available to make goods and services. Consumers, businesses and government want to make decisions that provide the greatest possible return (output or return on investment) from the resources they have available. Economics is about using the resources you have to get the most of what you want. Listen to Coach Thomas

These are the four factors of production. The factors of production are the productive resources used to produce goods and services. They include natural resources, human resources, capital resources, and entrepreneurship. These are the four factors of production. Listen to Coach Thomas

Natural resources are “gifts of nature” and exist without human intervention. Listen to Coach Thomas

Human resources refer to the effort of people which is applied to the production of goods and services. Listen to Coach Thomas

There are two types of capital resources. Physical capital or Real Capital refers to manmade goods, such as tools, which are used to produce other goods. Human capital refers to the skills and knowledge a person has acquired through experience and/or education. Listen to Coach Thomas

Entrepreneurs are individuals who are willing to take risks, to bring the other resources together and develop new products, and start new businesses. They recognize opportunities, like working for themselves, and accept challenges. Entrepreneurs accept the risks in organizing resources to produce goods and services because they expect to earn a profit. Listen to Coach Thomas

Important Vocabulary Entrepreneurs are people who take calculated risks in order to start new businesses and develop innovative products and processes. Human resources - the effort of people which is applied to the production of goods and services. Human capital - the skills and knowledge a person has acquired through experience and/or education. Capital (sometimes called real capital or physical capital) --manmade goods, such as tools, which are used to produce other goods.