1. FACTORS OF PRODUCTION
4 Types of Resources

2. inputs or.________________
Factors of Production
(FOP’s) are also called
resources or
scarce resources or
inputs or.________________
Or ______or______ 2

3. What Are Resources?
The assets (things of value) to supply and produce goods and services to meet the needs and wants of ___________

4. INPUTS & OUTPUTS
Before products (_______/_______) can be consumed , they must be produced.
Factors of production constitute the
input
While the goods & services produced constitute the
outputs

5. Factors of Production
Resources that can be used to produce goods and services .
Land (natural resources)
Labor (human resources)
Capital
Entrepreneurship

6. Factors of Production

7. Production
-the process of transforming naturally occurring materials (*that provide little satisfaction in their natural state) to products
*that provide more satisfaction.
Wants and Needs Satisfying Process 7

8. Land provides the basic raw materials that become the goods.
Labor does the hands-on work.
Capital is the tools that makes the job easier.
& Entrepreneurship organizes the entire process. 8 8

9. Interdependent LAND + LABOR CAPITAL ENTREPRENEURSHIP =
PRODUCTS ( GOODS/SVCS )
Interdependent

10. Land is the naturally occurring materials of the planet
*that are used for the production of goods & services
including the land itself SOIL- where crops can grow- Nutrients in the ground to produce vegetables,
Livestock to provide meat
Flora _____ Fauna _____
The air we breathe LUMBER, STEEL
Minerals/Metal-- such as copper, lead, iron , gold, coal etc. 10

11. “Gifts of Nature”- all things found in nature.
W/O land, there is no production.
RENEWABLE & NON-RENEWABLE

12. Land is the passive FOP WHY?
A land simply exists Q

13. *
Land- this just doesn't refer to the surface-land of the business but also includes lal ohert uraalnt seurcoers keil teawr, ilo, sag.

14. 2) LABOR (Human Resource)

15. *Labor
*Labor is the mental and physical efforts of humans (excluding entrepreneurial organization) used for the production of goods and services.
*Labor includes both the physical effort of factory workers and farmhands often associated with labor, as well as the mental effort of executives and supervisors. 15

16. LABOR Work time and work effort
Human Resource- any human effort exerted during production (except ENTREPRENEURSHIP)
1) # OF HOURS WORKED
2) SKILLS
The work that people do
Work time and work effort
Can be physical(______collar) or intellectual(_______collar)
Quality of labor increases w/ motivation, training & education

17. Q #2 One way to improve human resources is to
a. provide recycled paper.
b. fill everyone's needs and wants.
c. educate ,train & _______ people.

18. * As such, land simply exists. PASSIVE
To make the gifts of nature satisfy our needs and desires, human beings must do something with the natural resources; they must exert themselves, and this human exertion in production is called labor.
Q LABOR IS ____?____

19. Labor is the rwko cefro of the business

20. Capital
Capital is the manufactured goods used in the production of other goods,
This factor must be produced using other factors of production,
*which means that society is often faced with the choice between producing consumption goods that satisfy wants and needs and capital goods that are used for future production. SEE PPC 20

21. * While a crew of construction workers might be able to fabricate a four-bedroom house with nothing but bare hands, an assortment of hammers, saws, and other tools is bound to make their work easier and more productive. SO-
-Without capital, labor would do ALL production "by hand."
The key role of capital in the production process is to make labor more productive.

22. CH 1 SEC 3
Real capital is the purchase of tools, machines and factories. When entrepreneurs purchase REAL CAPITAL, they are adding to what is known as CAPITAL to their company.
**************************************************
*This makes it possible for that company to now push its production possibilities curve outward (to the right). This is known as economic growth. (Coming Soon)
The economy can now have more consumer goods and more capital goods.

23. CAPITAL -materials used to create goods or services
CAPITAL GOODS- buildings, machinery, equipment and tools used in the production process
MONEY- used to buy Capital Goods or finance a new business

24. EX’s CAPITAL VS CONSUMER
*Capital goods are used in making finished products that people buy.
-These finished products – the goods and services that people buy, are called consumer goods.
EX’s CAPITAL VS CONSUMER

25. *Passive-Active

26. ID THE FOP Delivery Truck Teacher Factory Tree
ATM machine Bushel of corn
River Hair stylist
Gold Barrel of oil
Doctor Sandwich
Bulldozer Tractor
Farmer Factory worker
Your car stereo

29. 4) ENTREPRENEURSHIP

30. Entrepreneurship
Entrepreneurship is the special sort of human effort that takes on the risk
Entrepreneurship is the FOP that organizes the other three.
* Without someone to organize production, the other 3 FOP’s do NOT produce.
A key component of entrepreneurship is risk.
* This resource takes the risk of organizing production BEFORE anything is produced and with no guarantee that production will be successful. 30

31. ENTREPRENEURSHIP ABILITY & RISK TAKING INVOLVED IN STARTING
1) A NEW BUSINESS
&/OR
2) A NEW PRODUCT

32. *

33. Thomas Edison 1847 – 1931 Only attended formal school for a few months
Taught by his mother
At 13 sold newspapers and
candy on a local train line
Obtained 1093 patents
during his life

34. Thomas Edison 1847 – 1931 His first successful invention was
to improve the stock ticker
First great invention was the tin foil phonograph which recorded sound
First demonstrated the electric
light in 1879
Invented the kinetoscope
or motion picture camera

35. *
Free Enterprise is based on the trrreeeennup that develops a business idea and then uses the other factors of production to carry out the activity

36. * Economists have used the four general categories of labor, capital, land, and entrepreneurship since the days of Adam Smith.
* These categories made a lot of sense with the onset of the industrial revolution in the 1700s, because factors of production (and especially owners of the factors of production) were largely segmented groups.
That was then, this is now. The lines between these four resource categories are frequently blurred in the modern complex economy. 36

37. Farmland provides an example of the blur between land and capital.
Q #5 - Is farmland
Land or Capital?
EXPLAIN 37

38. Technology- the 5th FOP ?
Use of science or technical knowledge to create or improve business

39. 3. publishing executive 4. salesperson 5. editor 6. petroleum
Consider the four factors of production that were needed to make your ECON book. ID the FOP.
1. trees computers
3. publishing executive 4. salesperson
5. editor petroleum
7. oil used for fertilizer
8. book presses
9. word processing specialist
10. typesetter
11. storage shelves
12. publisher’s building site