1. SS.912.E.1.1 Identify the factors of production and why they are necessary for the production of goods and services Standard 1 Understand the fundamental concepts relevant to the development of a market economy SS.912.E.1.1 Identify the factors of production and why they are necessary for the production of goods and services

2. 3 “Classic” Factors: 1)Land 2)Labor 3)Capital

3. A More Comprehensive and Complete Listing: 1)Land, with varying degrees of fertility 2)Natural Resources 3)Machines and other human-made physical resources 4)Animal Resources 5)Technology 6)Human Resources, including skills, talent, and knowledge

4. Why necessary? Resources are the inputs to the production process Without them, we couldn’t produce goods and services to sustain living standards

5. The Great Economics Mysteries Book Chapter 5 Lesson 1 Why Haven’t We Run Out of Natural Resources? Economics Mystery activities.pdf Economics Mystery activities.pdf

6. The Great Economics Mysteries Book Chapter 5 Lesson 1 Why Haven’t We Run Out of Natural Resources? Prices act as incentives, influencing people’s decisions. When prices for natural resources go up, consumers face an incentive to cut back on their use of those resources- as they did in the 1970s when the price of oil increased (Clue 4). At the same time, rising prices create an incentive for producers. It is an incentive to earn profits by increasing production through the use of improved technology to find new reserves (Clue 5). The price-related incentives are powerful. Profits provide natural resource producers with an incentive to develop new technologies that reduce the costs of production and keep prices low (Clue 8).

7. Video: Stossel 2007 Oil Supplies

9. Focus: Understanding Economics in US History Lesson 20 Was Free Land a Good Deal? History visuals\lesson20_visuals.pdf History visuals\lesson20_visuals.pdf

10. Focus: Understanding Economics in US History Lesson 20 Was Free Land a Good Deal? Economics History activities.pdf Economics History activities.pdf

11. Example of free land Video: Far and Away

13. The Great Economics Mysteries Book Chapter 5 Lesson 4 The Tragedy of the Commons Economics Mystery activities.pdf Economics Mystery activities.pdf

14. The Great Economics Mysteries Book Chapter 5 Lesson 4 The Tragedy of the Commons From an economic perspective, the problem presented by each case is one of insufficient or perverse incentives. The incentives in play do not encourage people to protect the environment (Clue 3). Indeed, in each case, some incentives encourage people to overuse or abuse the threatened resource- salmon, elephants, and whales. The incentives would change for the better if a way could be found to establish private ownership rights or something close to private ownership rights (Clue 4) for threatened resources. When nobody owns a population of fish, for example, it is in the interest of a fisherman to catch as many fish as possible. Not to do so is to leave fish for others to catch. In other words, fish owned by nobody- like wild salmon off the American Northwest coast- have no protectors. If ownership rights could be established, the owners of the fish could use the legal system- courts and appropriate law enforcement officers- to protect their valuable property.

15. Video: History Channel farming technology (Longer clip, but lots of good history)

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