Goods and Services Goods = physical objects Services = actions or activities that one person performs for another

List all the Goods and Services you can think of in our economy

Factors of Production The resources that are used to make all goods and services Economists identify Four Factors of Production: Land, Labor and Capital (Physical and Human)

Land All natural resources (materials found in nature) used to produce goods and services.

Labor The effort a person devotes to a task for which the person is paid.

Capital Any human-made resource used to produce other goods and services There are two types: physical and human

Physical Capital Human-made objects used to create other goods and services

Human Capital Knowledge and skills a worker gains through education and experience

Chocolate Chip Cookies Partner Activity Imagine an alien from Mars just arrives on earth and has developed a taste for Chocolate Chip Cookies Make an extensive list of EVERYTHING needed to produce chocolate chip cookies. Label each thing you listed as one of the four factors of production.

Chocolate Chip Cookies Partner Activity

McDonald’s French Fries Partner Activity Make an extensive list of EVERYTHING needed to produce McDonald’s French Fries Label each thing you listed as one of the four factors of production.

Choose a product that you use frequently Choose a product that you use frequently. Write a paragraph in which you explain the production of this product. Specifically identify each of the four factors of production