4 Types of Resources
3 Economic Questions
Reference Chapter 1.4
in your text for additional information
Resources = Factors of Production
Economists classify RESOURCES
in 4 categories
1. Land
2. Labor
3. Capital
4. Entrepreneurship
Land
includes all natural resources
LABOR
Capital= produced goods that can be
used for further production
• Farm machinery, industrial tools, factories
• Also, commonly, investment money
Entrepreneurship
• The special talent some people have for
searching out and developing new ideas
• The special talent for developing new
products and new ways of doing things.
But how is an entrepreneur different from an inventor?
Which category of resources
identifies these?
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Frida’s work as a secretary
Iron ore
Crop-duster airplane
Computer used to write a book
Comedian telling jokes on tv
Singer in an out-door concert
Teacher
Someone inventing and marketing a new good
Crude Oil
Deep sea oil platform
People need resources so they pay
for them.
We can describe that
payment by using money.
Monetary payments to
Resources:
Monetary payments
to Resources:
1. Land
Rent
2. Labor
Wages
3. Capital
Interest
4. Entrepreneurship
Profit
Price = the sum of the monetary
payments to resources
3 questions every society
must answer
• What goods shall be produced?
• How will the goods be produced?
• For whom will the goods be produced?
How a society answers those questions
defines its economic system.
___________
X
Free Enterprise
• “Market Economy”
• Capitalism
• Characteristics:
Socialism
• “Command Economy”
• Communism
• Characteristics
Private Ownership of Resources
Government Ownership of Resources
Government plays a small role
Government Controls the Economy
No central economic plan
Government creates a central plan
Variable Income Distribution
Government may redistribute income
Market supply and demand sets
prices
May use price controls to regulate market
___________
Free Enterprise
Socialism
X
MIXED ECONOMY
Ownership of resources; private property?
Governments Role in the Economy?
Intervention in the Market; the role of price?
Homework: Create a poster no larger
than 8x11
• For the country you’ve selected, please research the
following:
– Where is it?
– What are the natural resources?
– What is its economic system?
– What is produced?
– How is it produced?
– For whom is it produced?
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What is government’s role in the economy?
Does it have a “free market”?
Is there private property?
Role of exports and imports?
– GDP
– Per capita income
Hint: User CIA World Factbook