AICE Economics – Thursday 8/22/24
Learning Goal:
The Factors of Production – Inputs required to produce any good or service.
Bellwork: (phones in the phone pouches, of course…)
Get out your note-taking supplies.
Agenda:
1. Notes
2. Work on Ch. 3 Notebook Check (upload to Schoology by 8/27)
Tomorrow:
Practice w/ FoP and finish up Notebook Check.
Learning Objectives
• Identify and define the four factors of
production: land, labor, capital, and
entrepreneurship
• Explain the difference between human
capital and physical capital.
• Explain the division of labor and
specialization and how they are
related.
• Explain the role of the entrepreneur in
the organization of the factors of
production in 21st century economies
and as a risk taker.
• Analyze real-world examples to
determine how the factors of
production are utilized in different
industries.
• Explain the role of each factor of
production in the production process.
• Apply the concept of factors of
production to analyze and propose
solutions for economic issues or
challenges.
• Evaluate the importance of each factor
of production in economic growth and
development.
Ch. 3: Factors of Production
(Textbook pgs. 16 – 21)
Labor as a Factor of Production
Labor refers to the physical and mental effort
exerted by individuals in the production of
goods and services.
It includes both skilled and unskilled workers,
referred to as the “quality of labour”.
Labor is crucial in the production process as it
contributes to the creation and delivery of goods
and services.
Capital as a Factor of Production
Capital refers to man-made resources used in the production process.
Physical Capital includes machinery, tools, buildings, and other physical
assets.
Human Capital includes skills and knowledge.
Capital is vital in the production process as it increases productivity and
efficiency by enabling the transformation of raw materials into finished products.
Entrepreneurship as a Factor of
Production
Entrepreneurship refers to the ability to organize and
combine the other factors of production to create and
manage a business venture.
Entrepreneurs drive innovation and economic growth.
Division of Labor and Specialization
Division of labor refers to the specialization
of tasks among workers, where each worker
focuses on a specific aspect of the
production process.
Division of labor and specialization are closely
related, as specialization enables workers to
become more efficient and productive in
their specialized tasks.
Factors of Production in the 21st Century
Technology and innovation have significantly
impacted the factors of production in the 21st
century.
Advancements in technology have led to
increased automation, reducing the reliance
on human capital.
Additionally, technology has improved the
efficiency of capital and allowed for the
development of new products and services.
•
•
Specialisation refers to a situation where individuals and firms, regions and entire economies
concentrate on producing some goods and services rather than others.
Can you think of any areas of specialisation at these different levels?
Fill in the table below
Level
Household
Workplace (e.g. school)
Workplace (e.g. supermarket)
Region of a country
Entire country
Example
• Specialisation refers to a situation where individuals and firms, regions and entire economies
concentrate on producing some goods and services rather than others.
• Can you think of any areas of specialisation at these different levels?
Fill in the table below
Level
Example
Household
Ironing/Gardening
Workplace ( e.g. school)
Teacher/Cleaner
Workplace ( e.g. supermarket)
Shelf stacker/Cashier
Region of a country
California (Tech services), Midwest
USA (corn)
Entire country
Angola (oil)
AICE Economics – Friday 8/23/24
Learning Goal:
The Factors of Production – Inputs required to produce any good or service.
Bellwork: (phones in the phone pouches, of course…)
1. Pick up the Factors of Production practice – NDP.
2. Get out your textbook and notebook.
Agenda:
1. Practice with the Factors of Production.
2. Complete Ch. 3 Notebook Check and upload into Schoology.
Monday:
Economic Systems
•
An economy currently splits its resources between two industries: agriculture and manufacturing.
How could you illustrate the country choosing to specialise in agriculture on a PPC diagram?
Figure 3.1
•
•
There is a movement along the PPC from point A to point B.
Now the country only produces agricultural goods and no manufacturing goods.
Figure 3.2
Division of labour
•
•
Over the last few hundred years, production of goods and services has taken place on a
much bigger scale compared to earlier. This has allowed production to be broken down
into a series of tasks. This is called the division of labour.
Can you think of the different tasks in each of these industries?
Fill in the table.
Industry
Pizza shop
Car factory
Garment factory
Tasks
Division of labour
•
•
Over the last few hundred years, production of goods and services has taken place on a much
bigger scale compared to earlier. This has allowed production to be broken down into a series
of tasks. This is called the division of labour.
Can you think of the different tasks in each of these industries?
Fill in the table.
Industry
Tasks
Pizza shop
Dough maker, toppings, putting in the oven, building
pizza boxes
Car factory
Moulding steel, putting on tyres, installing car seats,
electrical wiring
Garment factory
Each worker produces one part of an item of clothing
such as a shirt sleeve, the front part or button holes
•
•
An economy currently splits its resources between two industries: agriculture and manufacturing.
How could you illustrate the new use of a division of labour process in its manufacturing industry?
• There would be an outward shift in the manufacturing industry.
• This is because more manufacturing units could be produced.
But production in the agricultural sector is unchanged.
Which of the following is the best example of physical capital?
A. A $100,000 business loan from a bank
B. A business hiring 10,000 workers at a factory
C. A truck for a delivery company
D. An oven for a family of four
E. An increase in construction jobs
Which of the following would cause an outward or rightward shift in the production
possibilities curve?
A. n increase in unemployment
A. An increase in inflation
B. An increase in capital equipment
C. A decrease in natural resources
D. A decrease in the number of workers