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Factors of Production

Factors of Production. - Capital or Capital Goods- --the money or tools needed to produce goods/services - Land / Resources – the natural resources needed to produce goods/services. Factors of Production. -Labor– the work required to produce goods/services

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Factors of Production

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  1. Factors of Production -Capital or Capital Goods---the money or tools needed to produce goods/services -Land / Resources– the natural resources needed to produce goods/services

  2. Factors of Production -Labor– the work required to produce goods/services -Management—the decision making process that is involved in producing goods/services

  3. Traditional Economy Advantages Disadvantages - - -economy where people supply most of the goods and services they use -many things are done by tradition -usually in places of little modern technology

  4. Command Economy Advantages Disadvantages - - -economy where the government controls the factors of production -Government makes all decisions

  5. Market Economy Advantages Disadvantages - - -individuals make all economic decisions according to supply and demand -laissez-faire economics -also called free market, free enterprise, or capitalism -competition and supply and demand determine the economy-----the “invisible hand”

  6. Mixed Economy Advantages Disadvantages - - -a mixing together of market and command systems -individuals have economic freedoms -government retains some control for benefit of citizens

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