Factors of Production

Objectives:

Define production Enumerate the factors of

production Identify the four forms of

income

Illustrate the Circular Flow of Goods and Services/Production Process

Identify problems and issues concerning the four factors of production

Make a creative output showing possible solutions to the identified problems

Production

Creation of goods and services

Objective:

Satisfaction of human needs and wants

Factors of Production

LAND

LABOR

CAPITAL

ENTREPRENEURSHIP

HOUSEHOLDSFIRMS

goods and services

factors of production

payment for goods and services

forms of income

Circular Flow of Goods and Services

Land

Characteristics

Limited Fixed The value may appreciate or

depreciate.

Rent

Payment for the use of land Stimulate construction of new

spaces Promote efficient maintenance Allocate existing resources

Factors affecting RENT

Demand Population Fertility/ rainfall Location/ accessibility Peace and order

Rent Control

Protects consumers Discourages construction of new

spaces

Ponder on this…

Is land reclamation a solution to the reality of having limited and fixed land?

Labor

Terms:

Labor Force Labor Force Participation Rate Employment Unemployment Underemployment Wage

Indicators April, 2013 April, 2012 April, 2011

Population 15 years and over

64 m 62.8 m 61.8 m

Labor Force 40.9 m 40.6 m 39.7 m

Labor Force Participation Rate

63.9 % 64.7 % 64.2 %

Employment Rate 92.5 % 93.1 % 92.8 %

Unemployment Rate

7.5 % 6.9 % 7.2 %

Underemployment Rate

19.2 % 19.3 % 19.4 %

(source: Labor Force Survey)

Read and analyze the data…

Write three significant observations or conclusions about the labor figures.

Capital

Physical or man-made resources Goods used in the production of other

goods

Depreciation

Decrease in the usefulness of capital goods

Wear and tear of capital goods

Accumulation of Capital

Savings BANKS Loans

FIRMS

Investment

Interest

Payment for the use of capital

Php

Watch the video on PPP and answer the question below…

Would you consider the PPP as an effective and efficient way to increase the country’s capital resources? Why? Cite three reasons.

Entrepreneurship

Organization and management of all the other factors of production to produce goods and services

Profit

Excess of receipts over expenditures

Total Revenue-Total Cost

Qualities

Visionary Energetic Dedicated Resourceful Innovative Creative Risk-taker

Ponder on this…

Is education necessary to become a successful entrepreneur?

Recap

How important are the following in attaining economic growth? Land Labor Capital Entrepreneurship