The resources used to produce goods and services Factors of Production The resources used to produce goods and services

Factors of Production Question: How do people use limited resources to satisfy unlimited wants? Answer: Society uses those resources to produce goods and services that satisfy the wants.

sometimes called Factor Inputs of Production Outputs Factors of Production sometimes called Factor Inputs of Production Land Labor Capital Physical Capital Human Capital Entrepreneurship Goods or Services

3 Criteria for Physical Capital Factors of Production Land Natural Resources Labor Man Hours Capital Physical Capital equipment, tools, machinery Human Capital skills, training & education of the worker Entrepreneurship Risk Taker 3 Criteria for Physical Capital It has been produced itself It is long-lasting It is used in the production of other goods & services