Productive Resourcesand 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.oPhysical Capital – tools, machines,

etc.oHuman 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:

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