Mexico and

The Factors of Production

Grade 6

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©2012, TESCCC

©2012, TESCCC

Key Understanding

Interaction between a country’s government, its economic system, and the factors of production often determines the level of economic development in a country.

Let us explore Mexico’s level of economic development.

First, we need to understand the factors of production.

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Mexico’s Government

• Three branches of government: Executive, Legislative and Judicial

• President is elected for only one term (serves a total of 6 years and may not serve again)

• Two political party system• Unfortunately, corruption within the

government decreases the number of outside investors.

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Mexico’s Economy

• Mexico has increased (printed more) money supply creating inflation and a devalue of their money.

• Lack of economic freedom (freedom to compete and protection of people)

• Corruption keeps the economy from growing because foreign investors are fearful of the instability.

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Industries of Mexico

• Manufacturing industries may take raw materials, buy materials from wholesalers, or buy materials from a retailer to make new products. – manufacturing in Mexico (Examples: clothing, toys, cars, houses, etc.

• Service industries provide intangible goods directly to the public, not final products – maquiladoras in Mexico (they provide labor, but companies are not Mexican), tourism as one of biggest industries after oil production.

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What determines the level of economic development for a country?

• Life Expectancy: the average number of years remaining in the life span of a person. (In Mexico– 76)

• Gross Domestic Product: a measure of the economy; the total market value of goods and services produced within a country per year. (In Mexico– 1.1 trillion)

• Gross Domestic Product per capita: this indicates the people’s standard of living; it is the country’s GDP divided by the number of people in the country. (In Mexico– $14,700)

• Literacy: the ability to read and write (In Mexico

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©2012, TESCCC

Mexico

Factors of Production

Defined: Inputs used in the production of goods and services

Examples

Land

Labor Capital: $$

Entrepreneurs(People willing to

invest)

Mexico’s Economic

System: Free Enterprise/Free

Market Economy

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The Factors of Production

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Land

• Natural resources• Characteristics

– A gift of nature– Limited in supply– Land is immovable– The supply of land involves no opportunity

cost

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Capital

• Man-made resources used for further production

• Examples: machines, raw materials, tools• Features:

– Man made

– It raises the productivity of other factors

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Is it LAND or CAPTIAL?

• Ice at Mount Everest• Ice in a skiing field• Sea water• Sea water in a seafood restaurant • Sharks in the Atlantic Ocean• Sharks at the Ocean Park

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Labor

• Any effort a person devotes to a task for which that person is paid.

• manual laborers, lawyers, doctors, teachers, waiters

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Entrepreneurship

• Ambitious leaders that combine the other factors of production to create goods and services.

• Examples-Henry Ford, Bill Gates, Inventors, Store Owners, etc.

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Free Enterprise Economy

• In a free enterprise economy, competition is allowed to flourish with a minimum of government interference.

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Four Characteristics of Free Enterprise

• 1. Economic FreedomPeople have the freedom to choose their occupation and their employer.

• 2. Voluntary Exchange The act of buyers and sellers freely and willingly engaging in market transactions.

• 3. Private Property

People have the right and privilege to control their possessions as they wish.

• 4. Profit Motive

People are free to risk their wealth in a business venture.

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What stories do murals tell?

• Muralists Diego Rivera, Jose Clemente Orozco, and David Alfaro Siqueiros were important artists in 20th century.

• The mural tradition continues today, as shown in the mural we saw painted on the fence.

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Artist Hector Duarte, who lives in Chicago, has turned his home into a giant mural representing the struggles of a Mexican immigrant

This is a ________________ that illustrates __________________________________.

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Corn

• Corn was first domesticated in Mexico about 8,700 years ago, around 6700 BC

• The story of corn is the story of Mexico.

• Public art in Mexico has a long history, predating European exploration

• Murals are one medium used to communicate with the people.

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