Wednesday, August 13 th , 2013 or Thursday, August 14 th , 2013

1. Wednesday, August 13th, 2013 or Thursday, August 14th, 2013 EQ: What are the 4 factors of production? Agenda • Lecture: 4 Factors of Production • NPR Story on Raves—applying the 4 factors • Practice MCs • If time later—The Lorax

2. The Four Factors of Production • a.k.a. Resources used to make CONSUMER g/s • Land • Labor • Capital • Entrepreneurship

3. Land • All natural resources • Oil, water, cows, coal, natural gas • Rent=income earned from land

4. Labor • Paid human effort • Teachers, associate attorney working for a firm, doctors working for a hospital, fast-food manager • Wages=income earned from labor resources

5. Capital • Physical capital—man made resources used to produce other goods/services. • Computers, factory machinery, office buildings, airplanes

6. Capital • Human Capital--Knowledge and skills obtained from education, on-the-job training, and experience. • Examples—K-12 education, college, technical school, training videos • Interest=income earned from capital resources • Investment in physical and human capital resources increases future growth in the economy!!!!! • NOT FINANCIAL CAPITAL—stocks, bonds, money

7. Entrepreneurship Must fulfill BOTH • Risk-taker • Combine the other factors to make/sell a product • What is the money called that an entrepreneur makes?

8. NPR Story • http://www.npr.org/blogs/parallels/2014/08/12/338320513/its-sunrise-in-london-and-time-for-a-rave • What 4 factors of production are involved in creating Morning Gloryville?

9. Cheerios • List at least one resource for each factor that goes into making Cheerios.

10. The Lorax Part 1

11. The Lorax Part 2

12. The Lorax Part 3

13. The Lorax • What was the main resource that was scarce? • List each of the four factors of production. Give multiple examples from The Loraxfor each of the factors. • Do you think that entrepreneurs act like the Onceler? • Did a market style economy work for the community? Why or why not? • Could the government have improved the market style economy in Oncelerville? If not, why? If so, how?

14. Factors of production are the a. goods that are bought by individuals and used to provide personal enjoyment. b. goods that are bought by businesses to produce productive resources. c. productive resources used to produce goods and services. d. productive resources used by government to increase the productivity of consumption. e. goods and services produced by the economy.

15. Which of the following correctly lists the categories of factors of production? • land, labor, capital, and entrepreneurship • land, buildings, capital, and entrepreneurship • labor, machines, buildings, capital, and entrepreneurship • forests, fish, buildings, capital, and entrepreneurship • Labor, money, stocks, and bonds

16. Economists classify energy and water as part of which factor of production? a. land b. labor c. capital d. entrepreneurship e. land if undeveloped and capital if developed

17. The United States possesses a large amount of human capital. As a result of this fact, in the United States there is a a. large amount of machinery and equipment. b. large number of people and a great deal of land. c. highly skilled and educated labor force. d. large number of kind and generous humans. e. large amount of machinery (capital) that is run by people (humans).

18. Capital is a factor of production. Which of the following is an example of capital? i. $1,000 in money ii. 100 shares of Microsoft stock iii. $10,000 in bonds issued by General Motors iv. A drill press in your local machine shop a. i and ii. b. ii only. c. iii only. d. iv only. e. ii and iii.

19. Payments to the factors of production are a. rent, mortgage, interest, and bonds. b. rent, interest, bonds, and profit or loss. c. rent, wages, interest, and profit or loss. d. rent, wages, profit or loss, and bonus. e. land, labor, capital, and entrepreneurship.