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Factors of Production And Economic Systems

Factors of Production And Economic Systems. Obj : Students will understand how limited factors of production require economic systems to distribute resources. Agenda : Quiz Inputs of Mustang? Factors of Production 3 Minute Case Study China’s Ghost Cities. The Factors of Production.

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Factors of Production And Economic Systems

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  1. Factors of Production AndEconomic Systems Obj: Students will understand how limited factors of production require economic systems to distribute resources. Agenda: Quiz Inputs of Mustang? Factors of Production 3 Minute Case Study China’s Ghost Cities

  2. The Factors of Production • Labor—exchanged for wages • Physical Capital—exchanged for interest • Investment—purchase of physical capital now with intent of benefiting later from it • Land, or natural resources—exchanged for rent • Entrepreneurship—bring together all else (pay interest, wages, and rent) in search of profit

  3. Income • Due to the exchanges that take place surrounding factors of production, the sum of wages earned, rent paid, interest collected, and profits gained is called income • Factor payments Welfare, scholarship, grants, loans???

  4. What is an economy? • What does it do? • What are its aims? • Mechanisms? • How is one better than another? • Is there a perfect economy? • Definition… A system that coordinates choices about production with choices about consumption, and then distributes goods and services to the people who want them.

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