Economic Resources
Factors of Production 1. Natural resources 2. Labor 3. Capital 4. Entrepreneurs
Factors of production Explain Natural resources Labor Capital Entrepreneur
Natural Resources Any gift of nature that makes production possible Examples: fields, rain, forest, minerals, oil
Labor Human resources Any way that people contribute to the production of goods Can be both physical and mental
Capital Tools, machinery, and buildings used in production Most capital is a result of production Consumer goods satisfy wants directly and capital goods satisfy wants indirectly
Entrepreneurs People who start a new business, introduce new products, and improve management techniques People take risk to make money Driving force in the economy
Gross Domestic Product GDP is the total dollar value of all final goods and services produced in a country in a year. It is an important measure of the standard of living- the quality of life based on the possession of necessities and luxuries that make life easier.
Bellwork Define Key Terms page 434
Answer the following questions from What does the circular flow chart on page 429 demonstrate? 2. What is a product market? 3. How does a product market differ from a factor market? 4. Why is economic growth important? 5. How do businesses increase productivity? 6. What is specialization? 7. How is division of labor a form of specialization? 8. How does the economic interdependence affect productivity?
Bellwork Define key terms on page 438
Consumer rights Congress has passed many laws that protect the rights of the consumer For example identifying the contents and the weight
Consumer Bill of Rights 1. Right to a safe product 2. Right to be informed 3. Right to choose 4. Right to be heard 5. Right to redress
Your Role as a Consumer 1. Uses of income 2. Decision making 3. What are your goals? 4. Saving for the future 5. Saving regularly 6. Decisions about your savings
Uses of Income Disposable income- money left over after taxes Discretionary income- money after paying bills Charge account- line of credit at a particular store Credit card- can be used at any store that accepts that card, then the credit card company sends a bill to the consumer
Decision Making Involves opportunity cost The cost of the next best alternative for the same money Example: do I spend $100 on pants or buy something else with that $100
What Are Your Goals If you want a new Ipad you may do extra chores to pay for it. You will not get some new shoes until you have your Ipad Create a budget
Saving for the Future The way to make large purchases like cars or homes is to save Saving is when you set aside a portion of your money every month
Saving Regularly Some business can take some of you money from your check and put it in a savings account for you Others may put money in savings themselves People can earn interest on their savings account
Deciding About Your Savings The more you save the more you will have later Deciding how much to save is up to you You should ask yourself these questions 1. How much do I spend everyday? 2. What’s my reason for saving? 3. How fast will my savings grow? 4. How much will I make in the future?