WHAT GOES INTO MAKING A PRODUCT? PRODUCTION WHAT GOES INTO MAKING A PRODUCT?

PRODUCTION The resources that go into making a product. There are 4 factors of production.

NATURAL RESOURCES The raw materials used to make a product. Examples-Water, cotton, wood, oil

CAPITAL The tools and machines used to make a product. (Hammer, nails, machines) Money is only considered capital when it is used to buy a factor of production

Entrepreneurship The leadership, the person who takes the risk of starting the business. Usually the person who gives the money and has the idea.

LABOR The human effort that goes into making a product. The people who run machines and do the work.

Division of Labor Dividing the work into smaller, separate tasks When labor is divided, people become SPECIALIZED. SPECIALIZATION- when workers concentrate on a specific task and become very good at that task.

SPECIALIZATION BENEFITS OF SPECIALIZATION 1. Workers become expert at a certain job or task. 2. The worker become better at his/her job. 3. The more you do a task, the faster, more efficient you become.

SPECIALIZATION PROBLEMS 1. Workers are dependant on each other. 2. If one person doesn’t do their job, it can cause a breakdown in production.

SCENERIO Think about a restaurant: 1. Where do you see division of labor in a restaurant? 2. How does this division of labor lead to specialization? What are caused when one person doesn’t do their job?