ECONOMICS AND FACTORS OF PRODUCTION

WHAT IS ECONOMICS? Economics is the study of the production, distribution, and consumption of goods and services- to meet people’s needs and wants.

 The more goods and services a country produces, the better its economy.  To produce any goods or services resources are needed. FACTORS OF PRODUCTION These resources are called FACTORS OF PRODUCTION

 Natural Resources  Capital Resources  Human Capital  ENTREPRENEUR  Natural Resources  Capital Resources  Human Capital  ENTREPRENEUR THE FOUR FACTORS OF PRODUCTION

 Natural resources are defined as everything in the universe that is not created by human beings. Examples: Air, sunlight, wood, and water. NATURAL RESOURCES

 Human capital refers to the skills of workers (labor), such as education, training, health. If you have ever been paid for a job, you have contributed human capital resources to the production of goods or services  Investments in human capital increase productivity.  Example: A teacher’s teaching certificate, a Doctor’s license to practice, and Yao Ming’s athletic training. HUMAN CAPITAL

 Capital resources are goods produced to make other goods and services, such as tools, buildings, machinery and even items such as boxes.  The higher the capital investment the higher the productivity. Example: An electric saw, helps a carpenter make a table faster. CAPITAL RESOURCES

 Someone who combines natural resources, capital resources, and human capital, to create a new business. ENTREPRENEUR

 Factors of Production describes and impacts the economy of a nation; the GDP - our next lesson... WHY FACTORS OF PRODUCTION?

LETS REVIEW!

THE ILLUSTRATION BELOW SHOWS THE FACTORS OF PRODUCTION THAT MIGHT BE USED IN A SMALL BUSINESS. IDENTIFY THE FACTORS OF PRODUCTION

 Factors of Production describes and impacts the economy of a nation; the GDP - our next lesson... WHY FACTORS OF PRODUCTION?

LETS REVIEW!

THE ILLUSTRATION BELOW SHOWS THE FACTORS OF PRODUCTION THAT MIGHT BE USED IN A SMALL BUSINESS. IDENTIFY THE FACTORS OF PRODUCTION

 1) Which one is NOT a Factor of Production? A.Natural resources B.Capital resources C.Market resources D.Entrepreneur REVIEW

2) Which is an example of investing in human capital? A. cash B. factories C. highways D. A degree in business management REVIEW

3) Which is an example of investing in capital resources by a company ? A. installing the latest Apple computers B. keeping old delivery trucks C. training more people. D. fixing outdated machinery REVIEW

4) Which is an example of a natural resource? A. wooden bench B. highways C. education D. corn REVIEW

5) A country that does not invest in human capital will have problems because A. there will be no money to pay its workers. B. workers will learn on their own the skills they need. C. businesses will not pay the taxes to pay for good schools. D. workers who are not educated, skilled, and healthy are less productive. REVIEW

6) ___________ is the study of the production, distribution, and ________ of goods and services. A) Factors of production, consumption. B) Economics, consumption. C) Capital investments, consumption D) Economics, destruction FILL IN THE BLANK

 7 ) Corn, honey, bread are all natural resources.  8) A pencil is an example of a capital resource.  9) A high school diploma is an example of human capital.  10) All four factors of production are needed to start a business. TRUE OF FALSE