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Factors of Production And Economic Systems

This lesson explores the factors of production and how they necessitate economic systems to allocate resources. Topics include labor, physical capital, investment, land or natural resources, entrepreneurship, factor payments, income generation, and economic mechanisms. Students will examine case studies, quiz inputs, and discuss the concept of economy, its functions, aims, mechanisms, comparisons, and the pursuit of a perfect economy.

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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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