1. endobj Also, the higher price of the good provi… Economics. <> Go to How the Economy Works 3. The Adobe Flash plugin is needed to view this content. economic goods: The four factors of production are inputs used in various combinations for the production of goods and services to make an economic profit. Watch It. Factors of production are the resources people use to produce goods and services; they are the building blocks of the economy. It affects consumers because they have to make a choice on what services or goods to choose. �L[ptoN��`j:v�%s endobj (5 marks) •Explain two ways by which resources are allocated in a mixed economy (4 marks) Chapter 1 Section Main Menu The Factors of Production • Land All natural resources that are used to produce goods and services. Capital includes items such as (A) (A) What are the four factors of production? It is the gap between limited resources and limitless use of any resources. 3 0 obj If there is an unlimited want or need of a resource, the scarcity will continue. Explain how scarcity affects the factors of production. The reserves of oil are limited; there is a scarcity of the raw material. • Capital Any human-made resource that is used to create other goods and services. Explain why scarcity and choice are the basis of economics. In a free market, this rising price acts as a signal and therefore demand for the good falls (movement along demand curve). So what does this mean for the people of Econ Isle? CFU Factors of production + scarcity = economics Economics: The study of scarcity and how scarcity affects the world around us FACTORS OF PRODUCTION Land Labor Capital (human, physical, financial) Entrepreneur FACTORS OF PRODUCTION Land: all natural resources. Use examples to explain what is meant by opportunity cost. Copy this cause-and-effect chart and fill it in as you read. The scarcity is considered as the basic problem of economics. The basic economic problem of scarcity refers to the situation in which finite factor inputs are insufficient to produce goods and services to satisfy infinite human wants. The resources that we value—time, money, labor, tools, land, and raw materials—exist in limited supply. • Labor Any effort a person devotes to a task for which that person is paid. x��VMo�F���#4���/�0|��)�V��`��J�M�J�����I�4ՃHj��fg�͛�� \__}�ysn��c8� ��R!J%X#!���o�`=(x��  p�eP�� f���Gy���@��BjE"�ي��> ��t7_�l���t�/a�%p�7�~��a+ �VD�t��Z�p�Xz��&�'#�9������)�'l�^�=mb�K~�p[%暙�Z���S��2Lo�=e�/�-�� Try It. ����(�"PgLCQ��+(WR�M�\����7�ZФO����,�β0��P�.fY�X� �3b1��5. The Production Pos s ibility Frontier-PPF is generated because of the Law of Scarcity. )Describe the four factors of production. To put it in different terms, the factors of production are the inputs needed for supply. 1. Capital 3. There are three major factors of production: 1. Factors of Production Definition. •The Factors of Production are: Land ( Natural Resources) Labor (Paid Workers) Capital (Money and Machines) Technology (Body of Knowledge) Our resources are limited by the 4 factors of production - land, labour, capital and enterprise. Scarcity. A key element of the factors of production is their scarcity. Describe what entrepreneurs do. 2 0 obj Explain how scarcity affects the factors of production. <> What economic concepts are represented in the production possibilities model? Capital refers to the improvements made to natural resources. Just so, how does scarcity affect your life be specific provide a real life example? Scarcity Economics The Factors of Production Entrepreneur In a magical world, there is no need for Economics but we live in a world of Scarcity. ����� �i�H_�v�@Zb��\AD�"CZ�D䀖( ��!%�Ca]�P���7/�9�Jȣ��y��t诳"���BJ�8}U��`��6T�4��3�)��K���)�* �����j�O��=�CS*B�"��6�a��M�WUz_ What is the relationship between wants, factors of production, scarcity, and choices? The unsustainable use of environmental resources in rural areas is accompanied by problems of lack of access to land ownership and a scarcity of production, social, credit and educational infrastructure, factors which put the rural population in a position of insecurity and disadvantage Productive resources and factors of production are explained again in more detail in the following video: Glossary. A number of factors can affect it. … Four factors of production are as follows: 1. 2. This condition is known as scarcity. SCARCITY AND THE FACTORS OF PRODUCTION In this lesson, students will be able to define the following key concepts: Scarcity. Labour 4. Entrepreneurship refers to the organization of all factors of production to profit. endobj 4. The factors of production are the resources used in creating and producing a good or service and are the building blocks of an economy. 3. <>>> If we take a good like oil. (6 marks) •Opportunity cost is very important to the government. SECTION 1 Scarcity and the Factors of Production Go to the Visual Glossary Online for an interactive review of opportunity cost. Enterprise. Identify any areas of scarcity in the fac-tors of production.If you were to create this product, how would this scarcity effect your final product? We need Economics. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. Scarcity Scarcity is the realization that our wants and desires are unlimited but the world’s natural resources are limited. This episode of our podcast series, The Economic Lowdown, discusses the factors of production. … Scarcity 6.3.12.E, 6.3.12.B Factors of Production 6.2.12.A, 6.5.12.D, 6.5.12.F Opportunity Cost 6.3.12.E What is the problem of scarcity? 1 0 obj Define the three factors of production and the differences between physical and human capital. Scarcity affects producers because they have to make a choice on how to best use their limited resources. The Factors of Production %PDF-1.5 Key Terms: Need -- Want Economics -- Goods Services -- Scarcity Shortage -- land Labor -- Labor Capital -- Physical Capital Human Capital Factors of Production -- entrpreneur The study of how people seek to satisfy their needs and factors of production are used to make the cars. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 720 540] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Land includes all natural resources, such as land, air, water, forests, wildlife, etc., 2. Actions. There are simply never enough resources to meet all our needs and desires. 2. Factors of Production and Economic Decision-Making Overview Students begin by learning what the four factors of production are. The Factors of Production . This article explores the key characteristics of the factors of production, the influences on their supply and also discusses the mobility of these factors.It also mentions the payments to factors of production. Land 2. Create, by either drawing or creating a model, a new product. Labour includes all mental and physical effort exerted by human beings, 3. Students then work in small groups to categorize different factors of production for certain industries and consider topics such as limited resources and scarcity. Research and present the factors of production for the product. Ï+íŽEêXi_ %VÚ=¤•6‰Ô4¬´RÏJ׊d-+Ý ‰XI ¤ÀJr"+‰ ½°’Rb%ÁP©XI$¸. "The availability, quality and costs of these factors affect costs of production, R&D … Download Share Lesson 2: Scarcity forces people to choose, and when people choose, there is an opportunity cost. This situation illustrates our second lesson. Scarcity occurs when there are limited quantities of resources to meet unlimited needs or desires Shortages occur when producers will not or cannot offer goods or services at current prices The Factors of Production Land All natural resources that are used to produce goods and services. 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