Factors of Production.pptx

Factor of production

1. Aim: What are the major factors of production in economics?

2. Four Factors of Production We use four basic resources to satisfy our needs and wants known as factors of production .

3. Four Factors of Production Land – this refers to all natural resources used to produce goods and services. This includes crops that are grown on a land, minerals that are mined from land and rent that is paid to an owner of land for its use.

4. Four Factors of Production Labor – this is the effort that an individual person puts into making a good or service. For this effort the person is paid a wage .

5. Four Factors of Production Capital – this is anything that is used to produce other goods and services . If you make cars you need machines to make the metal that is used in the cars. It is also the truck that drives the cars to the dealer who sells them, and it is the building that the cars are made in.

6. Four Factors of Production Entrepreneurs – risk taking individuals in search of profit . They are often thought of being the driving force in an economy because they are the people who start new businesses or bring new products to the market.

7. Goods and Services A Service Is…..                   A Good Is…..                   Using the space below list the characteristics of goods vs. services a physical thing you can hold is some thing that gets used up right after it is purchased

8. What are two reasons we study economic? 1. We want to be good consumers . Since our resources are limited we have to make choices. 2. We also study economics to be good citizens . Economics affects us as a citizen through our voting decisions.

9. How does economics play an important role in our lives? •We want to have good information as consumers to make sure we spend our limited resources in a good way. •As a citizen we want to make sure the government is spending money in a way we agree with. •If we don’t agree with the government, then we can exercise our right as a citizen and vote for change.