Warm Up – April 29 Answer the following questions on a post it: Explain the difference between a want and a need and how wants and needs can effect the choices consumers make when buying decisions? Describe the differences between a free market economy, a command economy, and a mixed economy. Provide an example of a country for each. What is the difference between a good and a service? What is a trade off? What is an opportunity cost? Provide an example of a trade off that you made in the past week? What was the opportunity cost of your decision?

Unit 7: THE ECONOMY Factors of Production

Factors of Production The resources that go into making a product. There are 4 factors of production: 1. Land 2. Labor 3. Capital 4. Entrepreneurship

Land Natural Resources and the raw materials used to make a product. Examples-Water, cotton, wood, oil

Labor The human effort that goes into making a product. The people who run machines and do the work.

Division of Labor Dividing the work into smaller, separate task When labor is divided, people become SPECIALIZED. SPECIALIZATION-when workers concentrate on a specific task and become very good at that task.

Specialization Benefits of Specialization: 1. Workers become an expert at a certain job or task. 2. The worker becomes better at his/her job. 3. The more you do a task, the faster, more efficient you become.

Specialization Problems of Specialization: 1. Workers are dependant on each other. 2. If one person doesn’t do their job, it can cause a breakdown in production.

Capital (Capital Goods) The tools and machines used to make a product. (Machines, equipment, chemicals) Money is only considered capital when it is used to buy a factors of production

Entrepreneurship The leadership, the person who takes the risk of starting the business. Usually the person who gives the money and has the idea.

TOD – April 29 Answer the following questions on the same post it: 1. What are the four factors of production? Describe each 2. What is specialization? 3. What are the benefits of specialization? What are the problems with specialization?