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Factors of Production
Objectives:
Define production Enumerate the factors of
production Identify the four forms of
income
Illustrate the Circular Flow of Goods and Services/Production Process
Identify problems and issues concerning the four factors of production
Make a creative output showing possible solutions to the identified problems
Production
Creation of goods and services
Objective:
Satisfaction of human needs and wants
Factors of Production
LAND
LABOR
CAPITAL
ENTREPRENEURSHIP
HOUSEHOLDSFIRMS
goods and services
factors of production
payment for goods and services
forms of income
Circular Flow of Goods and Services
Land
Characteristics
Limited Fixed The value may appreciate or
depreciate.
Rent
Payment for the use of land Stimulate construction of new
spaces Promote efficient maintenance Allocate existing resources
Factors affecting RENT
Demand Population Fertility/ rainfall Location/ accessibility Peace and order
Rent Control
Protects consumers Discourages construction of new
spaces
Ponder on this…
Is land reclamation a solution to the reality of having limited and fixed land?
Labor
Terms:
Labor Force Labor Force Participation Rate Employment Unemployment Underemployment Wage
Indicators April, 2013 April, 2012 April, 2011
Population 15 years and over
64 m 62.8 m 61.8 m
Labor Force 40.9 m 40.6 m 39.7 m
Labor Force Participation Rate
63.9 % 64.7 % 64.2 %
Employment Rate 92.5 % 93.1 % 92.8 %
Unemployment Rate
7.5 % 6.9 % 7.2 %
Underemployment Rate
19.2 % 19.3 % 19.4 %
(source: Labor Force Survey)
Read and analyze the data…
Write three significant observations or conclusions about the labor figures.
Capital
Physical or man-made resources Goods used in the production of other
goods
Depreciation
Decrease in the usefulness of capital goods
Wear and tear of capital goods
Accumulation of Capital
Savings BANKS Loans
FIRMS
Investment
Interest
Payment for the use of capital
Php
Watch the video on PPP and answer the question below…
Would you consider the PPP as an effective and efficient way to increase the country’s capital resources? Why? Cite three reasons.
Entrepreneurship
Organization and management of all the other factors of production to produce goods and services
Profit
Excess of receipts over expenditures
Total Revenue-Total Cost
Qualities
Visionary Energetic Dedicated Resourceful Innovative Creative Risk-taker
Ponder on this…
Is education necessary to become a successful entrepreneur?
Recap
How important are the following in attaining economic growth? Land Labor Capital Entrepreneurship