Intro terminology

The four Factors Of Production “L.L.C.E.”

Resources fall into 4 categories Land Labor Capital Entrepreneurship

LAND – physical space Natural resources –Renewable and Non-renewable To provide food, clothing, shelter 1. Apple orchard 2. city lot, gasoline 3. city lot

Labor Human sweat and skill 1. Apple pickers’ time 2. gas station attendant’s time 3. computer programmer’s time

Capital The equipment and structures used to produce goods and services Goods produced in the past, being used in the present, to produce new goods and services 1. Ladders, baskets, trucks: bag of apples 2. Gas station, pumps, lifts: full tank 3. Office building, computers: new software

Entrepreneurship The process of bringing together the three factors of production (L, L, C) A risk taker Inventor, innovator, organizer –Introduces new or improved Products, techniques, management

GOODS AND SERVICES BUSINESS FIRMS SELL FINISHED GOODS AND SERVICES TO HOUSEHOLDS

Goods – products or commodities, Physical or tangible A SCISSORS

Services – actions or activities INTANGIBLE GOODS Provided, Cannot be resold A HAIRCUT