and allocation of those resources Productive Resources and allocation of those resources

Standards SSEF1b: Define and give examples of productive resources SSEF1c: List a variety of strategies for allocating scarce resources

Unlimited Wants & Limited Resources Two Terms, Same Meaning Productive Resources = Factors of Production The Factors of Production/Productive Resources are considered “Scarce Resources”. Unlimited Wants & Limited Resources

What are Productive Resources? Anything used to produce goods and services There are 4 types of Productive Resources. We call them the “Factors of Production” Or FOP’s

Factors of Production Land – Examples: “Gifts of nature” Anything that occurs naturally Examples:

Factors of Production 2. Labor – the physical abilities and time of human beings available to produce goods and services; efforts, ability and skills

Factors of Production 3. Capital – the tools, equipment and machinery Physical Capital – tools, machines, etc. Human Capital – skills, knowledge, and/or training of individuals.

Factors of Production Entrepreneurship – someone who takes a risk to start a business by bringing together the other three factors of production in an innovative way.

Land, Labor, Capital, Entrepreneurship Need a way to remember? Land, Labor, Capital, Entrepreneurship Just use your CELL (NOT that one!) Capital Entrepreneurship Land Labor

Now that we have productive resources…. What do we do with them?

Allocating Scarce Resources Society has to decide how to allocate its scarce resources. Allocate: To distribute according to a plan

Allocation Strategies Supply and Demand Authority Rationing of a resource based on who can afford the price set by the market. More supply = Lower price Less supply = Higher Price A person or a group of people in power can make and implement a decision quickly. Authoritarian governments decide how to distribute resources and enforces the decision through military/police power

Allocation Strategies Random Selection (Lottery) First come, First Served This gives everyone who wants the resource equal odds of receiving it. This strategy can be inefficient because it may allocate the resource to a purpose or person who does not need it or know how to produce using it. (Ex: Farm land People receive a resource if they are the first one in line for it. Concerts Sporting events Stores

Allocation Strategies Personal Characteristic Contest Resource go to the person who wins. Race Academics (valedictorian) Test of knowledge Resources are distributed based on need or merit. Scholarships Jobs

Factors of Production Divide into 4 equal squares Label each square: Land, Labor, Capital, Entrepreneurship Define each Come up with 5 (FIVE) examples of each Make it pretty 