1. THE FACTORS OF PRODUCTION What to produce?

2. There are 4 Factors of Production:
Land or Natural Resources
Capital
Labor
Entrepreneurship

3. Land or Natural Resources
Materials that are NATURALLY MADE and transformed into something else
Examples:
Oil
Timber
Land
Crops
Natural gas
Milk

4. 2 Types of Natural Resources
RENEWABLE
Can be replaced or renewed or recycled
ex: wood, water, crops
NON-RENEWABLE
Once used, resource is gone
Ex: Oil, Natural Gas, Gold

5. LABOR PEOPLE who work to produce a good or service Example:
Construction worker
Teacher
Line cook

6. ALWAYS a PERSON!

7. Types of Labor
Blue Collar: typically performs “manual” labor (uniform)
White Collar: typically performs more “business” like labor
Professional: most advanced type of labor- highest educational degrees.
Skilled: typically knows a craft

8. Capital
PHYSICAL
Man-made instruments that assist in making something else
Examples:
Hammer
Robot
Book
Computer

9. ALWAYS a THING!

10. Capital
HUMAN
Investment in knowledge or training for a laborer to become more productive
Examples:
Training programs
Skills development
Advanced degrees

11. Entrepreneurs
People who RISK time and money ($) to start their own business and organize the other factors of production.
Examples:
P. Diddy
Lemonade Stands
Martha Stewart