Chapter 2 Economic Resources and Systems Section 2.1 Economic Resources

Making Economic Decisions Resources are used to make goods and services. Resources are used to make goods and services. Scarcity: lack of resources Scarcity: lack of resources Principle of scarcity Principle of scarcity There are limited resources for satisfying unlimited wants and needs There are limited resources for satisfying unlimited wants and needs Because resources are limited, to have one thing may result in giving another thing up. Because resources are limited, to have one thing may result in giving another thing up.

Factors of Production Factors of Production: all the economic resources necessary to produce a society’s goods and services Factors of Production: all the economic resources necessary to produce a society’s goods and services Natural resources Natural resources Labor resources Labor resources Capital resources Capital resources Entrepreneurial resources Entrepreneurial resources

Natural Resources Natural resources: materials from nature that are used to produce goods. Natural resources: materials from nature that are used to produce goods. Trees, water, oil. Trees, water, oil. Natural resources are usually processed in various ways to make products. Natural resources are usually processed in various ways to make products. Many economies are based on the country’s natural resources. Many economies are based on the country’s natural resources. Some natural resources are renewable like cows and wheat. Some natural resources are renewable like cows and wheat. Some natural resources are nonrenewable or limited like coal and crude oil. Some natural resources are nonrenewable or limited like coal and crude oil.

Labor Resources Labor resources: the people who make the goods and services for which they are paid. Labor resources: the people who make the goods and services for which they are paid. Skilled or unskilled, physical or intellectual. Skilled or unskilled, physical or intellectual. Which is physical and which is intellectual? Which is physical and which is intellectual? Teacher Teacher Carpenter Carpenter Truck Driver Truck Driver Lawyer Lawyer Accountant Accountant

Capital Resources Capital resources: the things used to produce goods and services, such as buildings, materials, and equipment. Capital resources: the things used to produce goods and services, such as buildings, materials, and equipment. Farmer - Tractor Farmer - Tractor Accountant – Computer Accountant – Computer Corporation – Office Building Corporation – Office Building

Entrepreneurial Resources Entrepreneurial Resources: used by the people who recognize opportunities and start businesses. Entrepreneurial Resources: used by the people who recognize opportunities and start businesses. Entrepreneurship: the process of recognizing a business opportunity, testing it in the market, and gathering resources necessary to start and run a business. Entrepreneurship: the process of recognizing a business opportunity, testing it in the market, and gathering resources necessary to start and run a business. Entrepreneur: an individual who undertakes the creation, organization, and ownership of a business. Entrepreneur: an individual who undertakes the creation, organization, and ownership of a business. He or she understands the risk of business ownership and seeks to gain profit and wealth from it. He or she understands the risk of business ownership and seeks to gain profit and wealth from it. Difference between Labor resources and Entrepreneurial resources: Difference between Labor resources and Entrepreneurial resources: Labor: people who produce the goods Labor: people who produce the goods Entrepreneurial: individual who start and direct a business to produce goods and services Entrepreneurial: individual who start and direct a business to produce goods and services

Homework Complete Ch. 2 Definitions-Packet (Unit 1 Vocabulary Folder) Complete Ch. 2 Definitions-Packet (Unit 1 Vocabulary Folder) Complete Chapter 2-1 Reading Activity and 2-1 Graphic Organizer (Unit 1 Reading Activities Folder) Complete Chapter 2-1 Reading Activity and 2-1 Graphic Organizer (Unit 1 Reading Activities Folder) Review questions on page 26, #’s 1-3 Review questions on page 26, #’s 1-3