1. Play Dough Economics Cornell Cougar Company Lesson 2 2010-2011 Tuchek

2. Production: How We Get the Goods and Services We Want To obtain goods & services they want, people must engage in production. Entrepreneurs (producers) take the initiative to purchase productive resources (inputs) and use them to produce the goods & services (outputs) they think consumers will purchase.

3. Productive Resources are classified into 3 basic groups:

4. Land is any natural resource. Oil

5. Water Land is any natural resource.

6. Trees & Land itself Land is any natural resource.

7. Labor is the human work effort, both physical & mental expended in production.

8. Capital refers to man-made physical resources.

9. Production Process Diagram: LAND + LAND + CAPITAL (Inputs) GOODS and SERVICES (Outputs)

10. * So how do people get the things they want? Businesses produce them * Businesses use productive resources to produce goods & services. * You are going to “produce” a good out of play dough.

11. Play dough Time… Your play dough represents land (some natural resource). Your work effort is the labor. Any small tool (pencil, ruler, or scissors) is your capital. (Use your “capital” to help make designs and marks so the good looks more realistic.) Examples of goods: boat, log cabin, desk, car, article of food or clothing, doll, etc.