Factors of Production

What are we going to do today? Define/Describe the factors of production Apply the factors of production to a product

Factors of production Choose a product (except a pencil), and list EVERYTHING that goes into making that product.

Factors of Production Try to identify which categories everything would go into Land Labor Physical Capital Human Capital

Land All natural resources that go into making something. The physical land and the natural resources

Labor Any human effort involved in production of a product.

Physical Capital Any man made object used in production of a good or service.

Human Capital Any knowledge or skills involved in the production of a product.

Directions: In your groups Brainstorm all of the resources that go into making a wooden pencil be as specific as possible. Entrepreneurship = Human Capital Identify each resource as land labor or capital.

Reading: Purpose: To identify the factors of production for making a pencil While reading I am a Pencil, find and annotate for the four different factors of production used in making a pencil. Choose four different colors or four different symbols to differentiate between them. Once finished go back to your groups sheet and add to your list

Discussion What happens when a resource used to produce something becomes too expensive? Why is the part of the pencil that actually writes made from graphite, not lead? How does this substitute resource (graphite over lead) affect the cost of pencils? What other safety factors influence the making of a pencil Why do you think the producer decided to attach the eraser to the top of the pencil? What do we call this? What is the difference between a #2 and #3 pencil? Why do most pencils have six sides? Why do some pencils cost more, and why do some people buy more expensive pencils?