Factors of Production

• A “Factor of Production” is a resouce society can use to make goods and services

• Also called a “productive resource”• Good–A item that is

manufactured• Service–A benefit that is

provided 4th graders-Birmingham Public Schools

Three TypesNatural Resources

• Natural Resources• Resources extracted from

our environment• Trees, land, minerals, oil

reserves, coal, natural gas, water, animals, ect.

• Essential “building blocks” of any economy.

• Finite limit on amount available

Three TypesCapital Resources

• Capital Resources• The means by which a good

or service is produced• Fixed Capital

• Factories, computers, buildings, machines,

• Intellectual• Education, music, inventions

• Financial• Money, stocks, bonds

• Both limited and unlimited

Three TypesHuman Resources

• Human Resources• Labor–mental or

physical • Farmers, factory

workers or service provides, ect

• Comprise majority of human resources--95%

• Entrepreneurs • Individuals who

combine the land, capital, labor into new products, ideas, services

• Unlimited?

Sustainable Resources

• Economist are put more focus on making our Natural resources sustainable• Limiting supply can cause

economic decline• Sustainability= rate of use is

equal to the rate of renewal• Which to Use?

• Coal or Solar Power• Oil or Bio Fuels