EQ: What are the 4 factors of production?Agenda1. Lecture: 4 Factors of Production2. NPR Story on Raves—applying the 4 factors3. Practice MCs4. If time later—The Lorax

Wednesday, August 13th, 2013 or Thursday, August 14th, 2013

a.k.a. Resources used to make CONSUMER g/s

LandLaborCapitalEntrepreneurship

The Four Factors of Production

All natural resourcesOil, water, cows, coal, natural gasRent=income earned from land

Land

Paid human effortTeachers, associate attorney working for a

firm, doctors working for a hospital, fast-food manager

Wages=income earned from labor resources

Labor

Physical capital—man made resources used to produce other goods/services. Computers, factory machinery, office buildings,

airplanes

Capital

Human Capital--Knowledge and skills obtained from education, on-the-job training, and experience. Examples—K-12 education, college, technical school,

training videos

Interest=income earned from capital resourcesInvestment in physical and human capital resources

increases future growth in the economy!!!!!NOT FINANCIAL CAPITAL—stocks, bonds, money

Capital

Must fulfill BOTH Risk-takerCombine the other factors to make/sell a

productWhat is the money called that an

entrepreneur makes?

Entrepreneurship

http://www.npr.org/blogs/parallels/2014/08/12/338320513/its-sunrise-in-london-and-time-for-a-rave

What 4 factors of production are involved in creating Morning Gloryville?

NPR Story

List at least one resource for each factor that goes into making Cheerios.

Cheerios

The Lorax Part 1

The Lorax Part 2

The Lorax Part 3

1. What was the main resource that was scarce?2. List each of the four factors of production.

Give multiple examples from The Lorax for each of the factors.

3. Do you think that entrepreneurs act like the Onceler?

4. Did a market style economy work for the community? Why or why not?

5. Could the government have improved the market style economy in Oncelerville? If not, why? If so, how?

The Lorax

a. goods that are bought by individuals and used to provide personal enjoyment.

b. goods that are bought by businesses to produce productive resources.

c. productive resources used to produce goods and services.

d. productive resources used by government to increase the productivity of consumption.

e. goods and services produced by the economy.

Factors of production are the

 A. land, labor, capital, and entrepreneurshipB. land, buildings, capital, and

entrepreneurshipC. labor, machines, buildings, capital, and

entrepreneurshipD. forests, fish, buildings, capital, and

entrepreneurshipE. Labor, money, stocks, and bonds

Which of the following correctly lists the categories of factors of production?

a. landb. laborc. capitald. entrepreneurshipe. land if undeveloped and capital if

developed

Economists classify energy and water as part of which factor of production?

 a. large amount of machinery and

equipment.b. large number of people and a great deal

of land.c. highly skilled and educated labor force.

d. large number of kind and generous humans.

e. large amount of machinery (capital) that is run by people (humans).

The United States possesses a large amount of human capital. As a result of this fact, in the United States there is a

i. $1,000 in moneyii. 100 shares of Microsoft stockiii. $10,000 in bonds issued by General Motorsiv. A drill press in your local machine shop a. i and ii.b. ii only.c.iii only.d. iv only.e. ii and iii.

Capital is a factor of production. Which of the following is an example of capital?

 a. rent, mortgage, interest, and bonds.b. rent, interest, bonds, and profit or loss.

c. rent, wages, interest, and profit or loss.

d. rent, wages, profit or loss, and bonus.e. land, labor, capital, and

entrepreneurship.

Payments to the factors of production are