Four Factors of
Production
1.
Land-
natural resources
2.
Labor-
work force
3.
Capital-
Physical:
human made objects used to create another goods and services ;
ex: buildings,
goods, machinery
Human:
knowledge/ skills gained through work/ education
4.
Entrepreneurship:
innovation and risk taking
Trade-offs:
alternatives that we give up whenever we choose on a course of action over the
other.
Opportunity
cost: the most desirable alternative given up by making a decision.
“Guns
and Butter”: Where the government is allocating the money
Ex:
guns= military butter= agriculture
Production Possibilities
Graph:
Alternative ways to use resources
Point D: Attainable, but inefficient
Reasons:
·
recession,
·
water/ famine
·
underemployment
·
unemployment
·
population loss
Point B and A: Attainable, but efficient
Point C: Unattainable
Reasons:
·
Economic growth
·
Technology
·
New resources discovered
This post was very detailed.
ReplyDeleteThe descriptions of your four factors of productions, more specifically, the entrepreneurship portion, had details I did not write down myself. Also, everything is well organized and easy to read.