PowerPoint #2: Factors of Production

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Presentation transcript:

PowerPoint #2: Factors of Production Economics Unit 1

Essential Question Explain the Factors of Production and the Production Possibilities Curve

€ Some money song E¢ONOMIC$

Factors of Production (Scarce Resources) Land - natural resources of “gifts of nature” Labor - physical and mental talents of workers Capital - tools, machinery, manufactured goods used to produce consumer goods Investment Entrepreneurial Ability - the idea or “sparkplug”, innovation, risk

Watch this video clip and explain each Factor of Production https://www.youtube.com/watch?v=7c4NRcKDrzw&t=2s

Production Possibilities Curve The Production Possibilities Curve (ppc) shows the maximum combination of goods and services that can be produced from a given amount of resources. Assumptions: Full Employment Fixed Resources Fixed Technology Two Goods Consumer Goods (Pizzas) Capital Goods (Industrial Robots)

Production Possibilities Model Optimal Allocation of Resources a c 15 10 5 MC MB = MC e b Marginal Benefit & Marginal Cost MB d Quantity of Pizza 1 2 3

Watch this video clip and explain how scarcity and choices effect producers https://www.youtube.com/watch?v=tW4G5IPpzFY&t=1s

Production Possibilities Table Robots Pizza 10 0 9 1 7 2 4 3 0 4

Production Possibilities Model Production Possibilities Curve A’ 14 13 12 11 10 9 8 7 6 5 4 3 2 1 G 1.1 B’ Unattainable A Economic Growth B C’ C Industrial Robots D’ D Now Attainable Attainable E E’ 0 1 2 3 4 5 6 7 8 9 Pizzas

Production Possibilities Model Production Possibilities Curve A’ 14 13 12 11 10 9 8 7 6 5 4 3 2 1 B’ Unattainable A Law of Increasing Opportunity Cost B C’ C Industrial Robots D’ Shape of the Curve D Attainable W 1.2 E E’ 0 1 2 3 4 5 6 7 8 9 Pizzas

Production Possibilities Model Production Possibilities Curve A’ 14 13 12 11 10 9 8 7 6 5 4 3 2 1 B’ Unattainable C’ Industrial Robots U D’ Under or Unemployment E’ 0 1 2 3 4 5 6 7 8 9 Pizzas

Answer the Essential Question in the minimum of five sentences Explain the Factors of Production and the Production Possibilities Curve