SS.912.E.1.1Identify the factors of production and whythey are necessary for the production ofgoods and servicesStandard 1Understand the fundamental conceptsrelevant to the development of a marketeconomySS.912.E.1.1Identify the factors of production and whythey are necessary for the production ofgoods and services
3 “Classic” Factors:3 “Classic” Factors:
1)Land1)Land
2)Labor2)Labor
3)Capital3)Capital
A More Comprehensive andComplete Listing:A More Comprehensive andComplete Listing:
1)Land, with varying degrees of fertility1)Land, with varying degrees of fertility
2)Natural Resources2)Natural Resources
3)Machines and other human-madephysical resources3)Machines and other human-madephysical resources
4)Animal Resources4)Animal Resources
5)Technology5)Technology
6)Human Resources, including skills,talent, and knowledge6)Human Resources, including skills,talent, and knowledge
Why necessary?Why necessary?
Resources are the inputs to the productionprocessResources are the inputs to the productionprocess
Without them, we couldn’t produce goodsand services to sustain living standardsWithout them, we couldn’t produce goodsand services to sustain living standards
The Great Economics Mysteries BookChapter 5 Lesson 1 Why Haven’t We Run Out of NaturalResources?The Great Economics Mysteries BookChapter 5 Lesson 1 Why Haven’t We Run Out of NaturalResources?
The Great Economics Mysteries BookChapter 5 Lesson 1 Why Haven’t We Run Out of NaturalResources?The Great Economics Mysteries BookChapter 5 Lesson 1 Why Haven’t We Run Out of NaturalResources?
Prices act as incentives, influencing people’sdecisions. When prices for natural resources go up,consumers face an incentive to cut back on their useof those resources- as they did in the 1970s when theprice of oil increased (Clue 4). At the same time, risingprices create an incentive for producers. It is anincentive to earn profits by increasing productionthrough the use of improved technology to find newreserves (Clue 5). The price-related incentives arepowerful. Profits provide natural resource producerswith an incentive to develop new technologies thatreduce the costs of production and keep prices low(Clue 8).Prices act as incentives, influencing people’sdecisions. When prices for natural resources go up,consumers face an incentive to cut back on their useof those resources- as they did in the 1970s when theprice of oil increased (Clue 4). At the same time, risingprices create an incentive for producers. It is anincentive to earn profits by increasing productionthrough the use of improved technology to find newreserves (Clue 5). The price-related incentives arepowerful. Profits provide natural resource producerswith an incentive to develop new technologies thatreduce the costs of production and keep prices low(Clue 8).
Video: Stossel 2007 Oil SuppliesVideo: Stossel 2007 Oil Supplies
Focus: Understanding Economics in US HistoryLesson 20 Was Free Land a Good Deal?Focus: Understanding Economics in US HistoryLesson 20 Was Free Land a Good Deal?
Focus: Understanding Economics in US HistoryLesson 20 Was Free Land a Good Deal?Focus: Understanding Economics in US HistoryLesson 20 Was Free Land a Good Deal?
Example of free landExample of free land
Video: Far and AwayVideo: Far and Away
The Great Economics Mysteries BookChapter 5 Lesson 4 The Tragedy of the CommonsThe Great Economics Mysteries BookChapter 5 Lesson 4 The Tragedy of the Commons
The Great Economics Mysteries BookChapter 5 Lesson 4 The Tragedy of the CommonsThe Great Economics Mysteries BookChapter 5 Lesson 4 The Tragedy of the Commons
From an economic perspective, the problem presented by eachcase is one of insufficient or perverse incentives. The incentives inplay do not encourage people to protect the environment (Clue 3).Indeed, in each case, some incentives encourage people to overuseor abuse the threatened resource- salmon, elephants, and whales.From an economic perspective, the problem presented by eachcase is one of insufficient or perverse incentives. The incentives inplay do not encourage people to protect the environment (Clue 3).Indeed, in each case, some incentives encourage people to overuseor abuse the threatened resource- salmon, elephants, and whales.
The incentives would change for the better if a way could be foundto establish private ownership rights or something close to privateownership rights (Clue 4) for threatened resources. When nobodyowns a population of fish, for example, it is in the interest of afisherman to catch as many fish as possible. Not to do so is to leavefish for others to catch. In other words, fish owned by nobody- likewild salmon off the American Northwest coast- have no protectors.If ownership rights could be established, the owners of the fish coulduse the legal system- courts and appropriate law enforcementofficers- to protect their valuable property.The incentives would change for the better if a way could be foundto establish private ownership rights or something close to privateownership rights (Clue 4) for threatened resources. When nobodyowns a population of fish, for example, it is in the interest of afisherman to catch as many fish as possible. Not to do so is to leavefish for others to catch. In other words, fish owned by nobody- likewild salmon off the American Northwest coast- have no protectors.If ownership rights could be established, the owners of the fish coulduse the legal system- courts and appropriate law enforcementofficers- to protect their valuable property.
Video: History Channel farming technologyVideo: History Channel farming technology
(Longer clip, but lots of good history)(Longer clip, but lots of good history)
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