1. Factors of Production

2. The Inputs of Production
Natural Resources
Entrepreneur
Labor
Capital:
Human
Physical

3. Natural Resources
Includes all materials used in production that come from the land
Soil, water, minerals, trees, etc…

4. Entrepreneur
Assembles all the factors of production to create new goods and services
Henry Ford, Martha Stewart, Bill Gates

5. Labor Performing a task for pay
Includes self-employed and assembly-line workers

6. Human Capital
Knowledge and skills a person gains through education or training
***Essential for technological growth and the maintenance of services in society

7. Physical Capital
Human-made objects used to create other goods and services(like intermediate goods)
Hammer, pencil, cash, bricks

8. Role of the Input
Most resources require a contribution from all the inputs, but the level of their input can vary to produce the same goods
Agriculture and Assembly-line phase out examples

9. Productivity Measured by the output per unit of input:
Labor: output per worker
Physical: hammer vs. nail gun

10. Division of Labor
Specialization and Division of Labor can increase productivity
Ford Video