Ch. 3 Productive Resources
CIE3M1
The Individual and the Economy
Ms. Sidi
How is apple juice made?
 What occurs in the process of making apple juice?
Resources & Production
 Productive resources: natural, human, and capital
 All of these resources are combined in production
Resources and Production
Which statement is correct? Discuss with your group
a. The more productive resources (natural, human, and capital)
we have, the more scarcity there will be
b. The more productive resources (natural, human, and capital)
we have, the less scarcity there will be
c. Both are correct
Natural Resources
Also called “land” by economists it includes minerals, forests, water
and fish i.e. all “free gifts of nature”
Canada’s natural resources:
• Canada is 2nd largest country in the world, but only 7% of land is
used for agriculture
• Key crops are wheat, barley, corn and tobacco
• Beef, pork and poultry products are also important
Natural Resources
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Fishing industry hard hit by depleted stocks
Canadian Shield full of minerals such as nickel
Huge reserves of coal, oil and natural gas
One of the largest supply of fresh water in the world
Human Resources
 Often called “labour” by economists, are the services
provided by workers used in an economy or a firm to
produce goods and services
 Must not only consider the number of workers, but also their
skills, knowledge, initiative, and effort
 Key element in any productive process. Why?
Human Resources
 Discuss how the following characteristics would affect the
production in a given community:
 Health
 Education and skills
 Work attitudes
 Population size
Capital Resources
• Goods used to produce other goods (e.g. factories, machines,
tools)
• Canada is a capital intensive economy because of the small
population and high wage rates
• Examples of capital goods:
 A dentist’s drill
 A musician’s trumpet
 A farmer’s combine
Capital Resources
To produce capital goods, a number of things must be met:
1. Leisure and consumption goods are the opportunity cost of
the capital goods
2. Skills to produce capital goods
3. Resources to devote to the production of capital goods
Capital Resources
• Short term pain leads to long term gain as capital goods increase
productivity and the standard of living with more goods and
services produced for all to enjoy
Production
 Any economic activity that satisfies human wants
 All productive activity divided into three categories:
 Primary: Working with raw materials (e.g. farmers, fishermen)
 Secondary: Manufacturing the raw materials into finished goods
(e.g. autoworkers)
 Tertiary: Offers services (e.g. salesperson, teacher)
Production Possibilities Curve
Production Possibility Curve Exercise
 Refer to the worksheet on the course website, and answer
questions 1a, 1b, and 1c only
 You may use lined paper when drawing the graph
The Law of Increasing Costs
Circular Flow Diagram