Productive
Resources
and allocation of those resources
Standards
• SSEF1b: Define and give examples of productive
resources
• SSEF1c: List a variety of strategies for allocating
scarce resources
What are
Productive Resources?
• Anything used to produce
goods and services
• 4 types of Productive
Resources. We call them
the
• “Factors of Production”
• Or FOP’s
• CELL
• Capital, Entrepreneurship,
Land, Labor
FOP: Land
•
•
“Gifts of nature”
Anything that occurs naturally
•
Examples:
FOP: Labor
• the physical abilities and time of
human beings available to
produce goods and services.
FOP: Capital
• the tools, machines, and
skills/knowledge/training of human
beings.
o Physical Capital – tools, machines, etc.
o Human Capital – skills, knowledge, and/or
training of individuals.
FOP: Entrepreneurship
•
someone who takes a risk to
start a business by bringing
together the other three factors
of production in an innovative
way.
Allocating Scarce
Resources
• Society has to decide how to allocate its
scarce resources.
Allocate:
To distribute (according to a plan)
Allocation Strategies
• Authority
• Governments make the
decision
• Authoritarian governments
= use military/police for
enforcement of resource
allocation.
• Rationing of a resource
• Supply/Demand
• More supply = Lower price
• Less supply = Higher Price
Allocation Strategies
• Random Selection/
(Lottery)
• Everyone has an equal
chance of getting resource
• Inefficient = resources go to
those who don’t need
it/want it.
• Ex: Farm land
• First come/First Served
• First in line gets the
resource:
• Concerts
• Sporting events
• Stores
Allocation Strategies
• Personal Characteristic
• Resources are
distributed based on
need or merit.
• i.e.: Scholarships, Jobs
• Contest
• Resource go to the
person who wins.
• i.e.: Race, Academics
(valedictorian), Test of
knowledge
Standards
• SSEF1b: Define and give examples of productive
resources
• SSEF1c: List a variety of strategies for allocating scarce
resources
• List 5 facts that will help you remember this lesson:
•
•
•
•
•