Chapter 2Chapter 2Economic Resources and Economic Resources and

SystemsSystems

Section 2.1Section 2.1

Economic ResourcesEconomic Resources

Making Economic DecisionsMaking Economic Decisions

Resources are used to make goods Resources are used to make goods and services.and services.

Scarcity: lack of resourcesScarcity: lack of resources Principle of scarcityPrinciple of scarcity

There are limited resources for There are limited resources for satisfying unlimited wants and needssatisfying unlimited wants and needs

Because resources are limited, to Because resources are limited, to have one thing may result in giving have one thing may result in giving another thing up.another thing up.

Factors of ProductionFactors of Production

Factors of Production: all the Factors of Production: all the economic resources necessary to economic resources necessary to produce a society’s goods and produce a society’s goods and servicesservices Natural resourcesNatural resources Labor resourcesLabor resources Capital resourcesCapital resources Entrepreneurial resourcesEntrepreneurial resources

Natural ResourcesNatural Resources Natural resources: materials from nature Natural resources: materials from nature

that are used to produce goods.that are used to produce goods. Trees, water, oil.Trees, water, oil.

Natural resources are usually processed in Natural resources are usually processed in various ways to make products.various ways to make products.

Many economies are based on the Many economies are based on the country’s natural resources.country’s natural resources.

Some natural resources are renewable like Some natural resources are renewable like cows and wheat.cows and wheat.

Some natural resources are nonrenewable Some natural resources are nonrenewable or limited like coal and crude oil.or limited like coal and crude oil.

Labor ResourcesLabor Resources

Labor resources: the people who make the Labor resources: the people who make the goods and services for which they are goods and services for which they are paid.paid. Skilled or unskilled, physical or intellectual.Skilled or unskilled, physical or intellectual.

Which is physical and which is intellectual?Which is physical and which is intellectual? TeacherTeacher CarpenterCarpenter Truck DriverTruck Driver LawyerLawyer AccountantAccountant

Capital ResourcesCapital Resources

Capital resources: the things used to Capital resources: the things used to produce goods and services, such as produce goods and services, such as buildings, materials, and equipment.buildings, materials, and equipment. Farmer - TractorFarmer - Tractor Accountant – ComputerAccountant – Computer Corporation – Office BuildingCorporation – Office Building

Entrepreneurial ResourcesEntrepreneurial Resources Entrepreneurial Resources: used by the people who Entrepreneurial Resources: used by the people who

recognize opportunities and start businesses.recognize opportunities and start businesses. Entrepreneurship: the process of recognizing a Entrepreneurship: the process of recognizing a

business opportunity, testing it in the market, and business opportunity, testing it in the market, and gathering resources necessary to start and run a gathering resources necessary to start and run a business.business.

Entrepreneur: an individual who undertakes the Entrepreneur: an individual who undertakes the creation, organization, and ownership of a business.creation, organization, and ownership of a business. He or she understands the risk of business ownership and He or she understands the risk of business ownership and

seeks to gain profit and wealth from it.seeks to gain profit and wealth from it. Difference between Labor resources and Difference between Labor resources and

Entrepreneurial resources:Entrepreneurial resources: Labor: people who produce the goodsLabor: people who produce the goods Entrepreneurial: individual who start and direct a business Entrepreneurial: individual who start and direct a business

to produce goods and servicesto produce goods and services

HomeworkHomework

Complete Ch. 2 Definitions-Packet Complete Ch. 2 Definitions-Packet (Unit 1 Vocabulary Folder)(Unit 1 Vocabulary Folder)

Complete Chapter 2-1 Reading Complete Chapter 2-1 Reading Activity and 2-1 Graphic Organizer Activity and 2-1 Graphic Organizer (Unit 1 Reading Activities Folder)(Unit 1 Reading Activities Folder)

Review questions on page 26, #’s 1-Review questions on page 26, #’s 1-33