1. 5.1 FACTORS OF PRODUCTION BBI 2O Name:

2. THE FACTORS OF PRODUCTION This section introduces you to the six major factors of production: 1. Natural Resources 2. Raw Materials 3. Labour 4. Capital 5. Information 6. Management

3. BEFORE WE BEGIN Now read the Profile on Ganong Bros. Limited on pages 153 to 154 and answer the following questions. You may also find the following website useful: https://ganong.com/our-sweet-story/ 1. How does Ganong Bros. Limited obtain the ingredients required to make their candies? What factors do they have to consider when deciding from where and when to make their purchases? Ganong Bros. Limited obtain the ingredients required to make their candies by purchasing its cocoa, sugar and nuts from countries around the world, to ensure that the highest quality raw materials are used in Ganong chocolate and candies. The factors Ganong Bros. Limited must watch for are events that can affect the supply and cost of such goods. For example: stock market issues, war, trade agreements, recession, climate affecting crops. 2. How is Ganong Bros. Limited different from other chocolate manufacturers? They were the first in Canada to have the first five cent bars, and the first to have the heart-shaped chocolate boxes for Valentine’s Day. They are also the oldest chocolatier in Canada and they still use the original recipe and method of production.

4. THE FACTORS OF PRODUCTION When we look at the chocolate making process we can see all the factors of production at work: 1. Natural Resources The cocoa beans along with sugar cane are some examples of natural resources 2. Raw Materials The cocoa beans, along with sugar are raw materials for chocolate 3. Labour People are required to work in the factories and to sell the product 4. Capital Money is needed to invest into the equipment, buildings, as well as cash, stocks and bonds to run the business 5. Information About new technology, customers, and more are required to be successful 6. Management People are required to make decisions on how to spend money and allocate the resources in the chocolate factories and stores.

5. BEFORE WE BEGIN You are productive if you produce something— be it a product, a service, or even an idea. Some people get paid for being productive; others (such as students like you) do not. List five productive people you know and, in a sentence or two, describe what they produce. How are you productive? 1. Teacher – provides/produces … a service, ideas, assignments, for/as/of learning assessments, knowledge 2. Artist – provides/produces … finished product, creative ideas, inspiration 3. Millwright – provides/produces … services machinery 4. Dance Teacher – provides/produces … service, instruction, generates ideas, creative performances 5. Engineer – provides/produces … ideas, products, service You: write essays, reports, ideas, projects, drama productions, produce props for drama, produce baked goods for bake sales...

6. THE FACTORS OF PRODUCTION You will read the “Oops!” section on the top left of page 156. Debate: Do you think that protecting a species of rat is more important than looking for more natural gas to meet Canada’s energy needs? With a partner, choose a side to defend and develop a short argument presenting your case.

7. THE SIX PRIMARY INDUSTRIES Natural Resources Fuel & Energy (natural gas, oil) Logging & Forestry (newspaper) Water (Hydro- Electricity, bottled water) Agriculture (flour, tofu, canned corn ) Mining (jewellery watches, cars, tin can) Fishing & Trapping (salmon steak, fur) Copy Fig 5.1. Also name one finished product that we get from each.

8. THE FACTORS OF PRODUCTION Non-Liquid Capital (harder to spend) Capital goods – buildings & equipment Intellectual property – ideas & talent Liquid Capital ( easy to spend) Cash Stocks Bonds Accounts Receivable Copy Fig 5.2 in your notes

9. THE FACTORS OF PRODUCTION Read pages 155 to 161 in The World of Business. Answer the following questions and complete the following diagrams. 1. List and describe briefly the six factors of production. Natural Resources – raw materials we get from the earth, water and the air Raw materials – ingredient that transforms into another product Labour – all the physical and mental work needed to produce goods or services Capital – the money invested in a business Management – the people who control the factors of production Information – the economy requires information about new technology, customers, competition, political conditions and sources of supply. 2. List and explain five capital goods a wheat farmer might need. Truck – transporting large objects Tractor – pulling the plows, harvesters and sowers Hoe – to till the land Hose – part of irrigation system Grain shredders – shreds grain into finer powder Seeds – to plant and culture

10. THE FACTORS OF PRODUCTION Read pages 155 to 161 in The World of Business. Answer the following questions and complete the following diagrams. 3. Describe the role of management in an organization. Management allocates the company’s resources, both capital and human, and decides what to purchase, what to make and where to sell it. To make sure workers are doing their jobs, people who control the factors of production and who run the company and departments within it. 4. How can information be a product? Businesses that have, or can access information that other businesses need/want and are willing to buy. Information becomes a product when a business is willing to pay for it.