Understanding the Major Factors of Production in Economics
Factors of production in economics encompass land, labor, capital, and entrepreneurship. Land represents natural resources, labor involves human effort, capital includes tools and machinery, and entrepreneurs drive innovation and risk-taking. These factors are essential for producing goods and services to meet society's needs and wants. Additionally, the distinction between goods and services, and the reasons for studying economics are highlighted in the content.
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Presentation Transcript
Four Factors of Production We use four basic resources to satisfy our needs and wants known as factors of production factors of production.
Four Factors of Production Land this refers to all natural resources 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. natural resources used to produce goods and services. This
Four Factors of Production Labor this is the effort For this effort the person is paid a wage effort that an individual person puts into making a good or service. wage.
Four Factors of Production Capital this is anything that is used to produce other goods and services 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. produce other goods and services. If you make
Four Factors of Production Entrepreneurs risk taking individuals being the driving force driving force in an economy because they are the people who start new businesses or bring new products to the market. individuals in search of profit profit. They are often thought of
Goods and Services Using the space below list the characteristics of goods vs. services Using the space below list the characteristics of goods vs. services A Good Is .. a physical thing you can hold A Service Is .. is some thing that gets used up right after it is purchased
What are two reasons we study economic? 1. We want to be good consumers choices. consumers. Since our resources are limited we have to make 2. We also study economics to be good citizens our voting decisions. citizens. Economics affects us as a citizen through
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 resources in a good way. limited As a citizen we want to make sure the government agree with. government is spending money in a way we If we don t agree with the government, then we can exercise our right as a citizen and vote vote for change.
