1. Scarcity, opportunity cost, and resources
Factors of Production
Scarcity, opportunity cost, and resources

2. Do Now: 1. Why do we have scarcity? 2. What is opportunity cost?
3. What is the term for a company or individual that can produce something using less resources than anyone else?
4. What is the term for an economy that has prices set by a government?

3. Essential Questions we are looking at today:
What are the four factors of production?
How do these factors influence production choices made by producers?
How does scarcity impact these factors of production?

4. What do you think of the car?
Make a list of all the resources that are used in the making of this car.

5. Brainstorm
1st-Think of how you would organize the list you just created. What categories would you put them into?
2nd- Find a partner and talk about your categories you came up with

6. Factors of Production:
Four factors
Capital Goods
Labor
Natural Resources
Entrepreneurship

7. Capital Goods
Man-made factor of production used by labor in making other products
Tools
Factories
Machines

8. Labor
Any form of human effort exerted in production. Can be skilled, unskilled, scientific, or artistic.
AKA human resources

9. Natural Resources
Any form of resources that go into producing goods or services. Ex: energy, mined materials, water, sun, oil
AKA “Land”
Sound familiar?

10. Entrepreneurship
The individual responsible for combining and organizing natural resources, capital goods, and labor to produce a good or service. The person who decides the what, how, and where to produce things.
Role could involve assuming the risks of business failure and/or providing the creativity and managerial skills necessary for production to take place.

11. Activity
When I say go break into groups of 3-4 students. One group member should grab the materials and the other members should put the desks together in a table. After you get your materials please sit silently in your groups so I can explain the activity.
GO!

12. Instructions When you’re in your groups:
Organize the terms on your poster
Potential category’s will be:
Restaurant
Bank
School
Textile Factory (clothing or fabric factory)
Factor of production
Natural, Labor, Capital, Entrepreneurship

13. Last part of organization
Choose 2 resources that you believe to be the most important. Put a Star by them.
Choose 2 resources that you believe to be the least important. Put a frowny face next to them.
Choose 2 resources you believe to be the most inexpensive for their importance. Put a smiley face next to them.
Choose 2 resources you believe to be the most expensive but necessary. Put a $ next to them.

14. Influences Scarcity Opportunity Cost Productivity Profit margin
Inverse economic relationship
Opportunity Cost
Fields for farming
Productivity
Human capital
Profit margin
Minimize scarcity and maximize low cost factors