UNIT ONE ~ CHAPTER ONE
LESSON THREE
~ THE FACTORS OF PRODUCTION ~
LESSON THREE
~ THE FACTORS OF PRODUCTION ~
• Four factors of production must be
present to produce goods and services
INTRODUCTION TO ECONOMICS
~THE FACTORS OF PRODUCTION~
• Four factors of production must be present to
produce goods and services:
• LAND
• LABOR
• CAPITAL
• ENTREPRENEURS
INTRODUCTION TO ECONOMICS
~THE FACTORS OF PRODUCTION~
• FACTORS OF PRODUCTION: resources required to
produce the things we would like to have (land, labor,
capital, and entrepreneurs)
• All four factors are required to produce resources
• Are you capable of identifying all factors?
INTRODUCTION TO ECONOMICS
~THE FACTORS OF PRODUCTION~
LAND
• In economics, land refers to “gifts of nature”
• Examples: desert, fields, forests, mineral
deposits, livestock, sunshine, feet, and climate
• There is a finite amount of land available; thus,
economists tend to think of it as being fixed, or in
limited supply
INTRODUCTION TO ECONOMICS
~THE FOUR FACTORS OF PRODUCTION~
LABOR
• Labor refers to people with all their efforts,
abilities, and skills
• This category includes all people except
“entrepreneurs”
• Factors such as birthrates, immigration, famine,
war, and disease have had dramatic impacts on
the quantity and quality of labor
INTRODUCTION TO ECONOMICS
~THE FOUR FACTORS OF PRODUCTION~
CAPITAL
• AKA “CAPITAL GOODS” – the tools, equipment,
machinery, and factories used in the production
of goods and services
• Capital Goods are unique because they result
from production
• Examples include: computers, bulldozers, trucks,
machinery, and printers
INTRODUCTION TO ECONOMICS
~THE FOUR FACTORS OF PRODUCTION~
ENTREPRENEURS
• Entrepreneurs are singled out because they are the
innovators responsible for much of the change in the
economy
• ENTREPRENEUR: a risk taker in search of profits who
does something new with existing resources
• ENTS are considered ‘drivers of the economy’ because
they are the people who start new businesses or bring
new products to market
INTRODUCTION TO ECONOMICS
~THE FOUR FACTORS OF PRODUCTION~
• Everything we make requires the FOUR FACTORS OF
PRODUCTION
• Everything can be categorized into the FOUR
FACTORS OF PRODUCTION
• When one factor of production is altered or affected, the
other three also affected
INTRODUCTION TO ECONOMICS
~THE FOUR FACTORS OF PRODUCTION~
HOW WELL DO YOU KNOW THE FOUR FACTORS OF
PRODUCTION?
IN GROUPS OF TWO, FIND TWO EXAMPLES OF EACH
OF THE FOUR FACTORS OF PRODUCTION. LABEL
THEM AND PRINT THEM OUT.
BE PREPARED TO SHARE WITH THE CLASS!