4 Types of Resources 3 Economic Questions Reference Chapter 1.4 in your text for additional information

Resources = Factors of Production

Economists classify RESOURCES in 4 categories 1.Land 2.Labor 3.Capital 4. Entrepreneurship

Land includes all natural resources

LABOR

Capital= produced goods that can be used for further production Farm machinery, industrial tools, factories Also, commonly, investment money

Entrepreneurship The special talent some people have for searching out and developing new ideas The special talent for developing new products and new ways of doing things. But how is an entrepreneur different from an inventor?

Which category of resources identifies these? Frida’s work as a secretary Iron ore Crop-duster airplane Computer used to write a book Comedian telling jokes on tv Singer in an out-door concert Teacher Someone inventing and marketing a new good Crude Oil Deep sea oil platform

People need resources so they pay for them. We can describe that payment by using money. Monetary payments to Resources:

1.LandRent 2.LaborWages 3.CapitalInterest 4.EntrepreneurshipProfit

Price = the sum of the monetary payments to resources

3 questions every society must answer What goods shall be produced? How will the goods be produced? For whom will the goods be produced? How a society answers those questions defines its economic system.

___________ “Market Economy” Capitalism Characteristics: “Command Economy” Communism Characteristics Free Enterprise Socialism Private Ownership of Resources Government plays a small role No central economic plan Variable Income Distribution Market supply and demand sets prices Government Ownership of Resources Government Controls the Economy Government creates a central plan Government may redistribute income May use price controls to regulate market X

___________ X MIXED ECONOMY MIXED ECONOMY Ownership of resources; private property? Governments Role in the Economy? Intervention in the Market; the role of price? Free EnterpriseSocialism

Homework: Create a poster no larger than 8x11 For the country you’ve selected, please research the following: –Where is it? –What are the natural resources? –What is its economic system? –What is produced? –How is it produced? –For whom is it produced? What is government’s role in the economy? Does it have a “free market”? Is there private property? Role of exports and imports? –GDP –Per capita income Hint: User CIA World Factbook