Factor of production

1. Aim: What are the major factors of production in
economics?

2. Four Factors of Production
We use four basic resources to satisfy our needs and wants known as
factors of production.

3. Four Factors of Production
Land – this refers to all natural resources used to produce goods and
services. This includes crops that are grown on a land, minerals that are
mined from land and rent that is paid to an owner of land for its use.

4. Four Factors of Production
Labor – this is the effort that an individual person puts into making a
good or service. For this effort the person is paid a wage.

5. Four Factors of Production
Capital – this is anything that is used to produce other goods and
services. If you make cars you need machines to make the metal that is
used in the cars. It is also the truck that drives the cars to the dealer who
sells them, and it is the building that the cars are made in.

6. Four Factors of Production
Entrepreneurs – risk taking individuals in search of profit. They are
often thought of being the driving force in an economy because they are
the people who start new businesses or bring new products to the market.

8. Goods and Services
A Service Is…..
A Good Is…..
Using the space below list the characteristics of goods vs.
services
a physical thing
you can hold
is some thing that
gets used up right
after it is
purchased

9. What are two reasons we study economic?
1. We want to be good consumers. Since our resources are limited we
have to make choices.
2. We also study economics to be good citizens. Economics affects us as
a citizen through our voting decisions.

10. How does economics play an important role in our
lives?
•We want to have good information as consumers to make sure we
spend our limited resources in a good way.
•As a citizen we want to make sure the government is spending
money in a way we agree with.
•If we don’t agree with the government, then we can exercise our right
as a citizen and vote for change.