Bellringer 4/8/13• Make a list of the four factors of production.

(hint: chapter 19 section 1)

Factors Of

Production

Bellringer 4/8/13• Make a list of the four factors of production.

(hint: chapter 19 section 1)

Factors Of

Production

Natural ResourcesLabor

Capital Entrepreneurs

• #5• Natural Resources

–Examples: fertile fields, abundant rainfall, forests, mineral deposits

–Materials that were transformed into something else.

• #5• Labor

–Nation’s labor force.–Human resources–Physical and Mental efforts put

into the production of goods and services.

• #5• Capital

–Also called capital goods.–Tools, machinery, and buildings

used to make other products.–Capital goods satisfy wants

indirectly by aiding in the production of Consumer goods.

• #5• Entrepreneurs

–Individuals who start new businesses.

–Individuals who introduce new products.

–Individuals who improve management techniques.

–Individuals who take risk in order to reap profits.

• Partner read pp.424-427, then answer p.427 #2-4, 6.

• Remember 10 point reading assignment grade also!

Groups

Bellringer #6 4/9/13

• Why are trucks considered a capital good?

Cooperative Activity-Capital Goods• You and your partner turn in on one sheet of

paper, make sure the date and both names are on it.

• Find at least two examples of capital goods that are used in school to provide the service of education.

• Would productivity go up or down if these capital goods were not available to our school? Explain why or why not.

p.427

• #2 How do economists define natural resources?

• Economists define natural resources as the “gifts of nature” that make production possible.

• #3 What are the major functions of the entrepreneur?

• The major functions of an entrepreneur are to start new businesses and bring products to market.

• #4 Is a pizza oven a capital good or a consumer good?

• A pizza oven is a capital good because it produces a consumer good. (pizza)

• #6 Study the table on p.426. • What is the Gross Domestic Product for that

particular economy?

• The GDP is $10.2 trillion.

Bellringer #7 4/10/13

• When do economists mean when they use the phrase “standard of living”?

• Be ready to explain your answer.

Before you read.• Let’s define Foreign.• Foreign – all other countries.• Answer – “What is a product market?”• A market where final goods and services are

bought and sold.• Answer - “What is specialization?”• Specialization is the using resources to produce

one or just a few services.• Examples:

SSPECIALIZATION

Individuals who specialize: Businesses that specialize:

As you read complete the chart.

Partners

• Read pp.428-432 - 10 point partner read assignment.

• Complete p.432 #2-6. Answer in complete sentences.

Ticket out of the door

• Don’t use any notes or books.• Do the best you can.• What are the four factors of production?

4/11/13 Bellringer #8

• Use each of these academic words in a sentence that reflects the word’s meaning.

• #1 Identical• #2 Allocate

As you read pp.430-432on your own, write two facts for each category of productivity and economic growth.• Productivity• Specialization• Division of Labor• Human Capital• Economic Interdependence

Section 2 wrap up (answer in complete sentences)• #1 What are factor markets and product

markets?

• #2 How does specialization increase production?

• #1 What are factor markets and product markets?

• Factor markets – the markets where productive resources are bought and sold.

• This is where consumers (me and you) earn our income.

• We earn wages, salaries, tips in exchange for our labor.

• Own land? You get rent.• Own Capital? Exchange capital for interest.

• #1 What are factor markets and product markets?

• Product market – this is where producers offer goods and services for sale.

• Businesses receive payment from consumers for goods or services.

• Businesses use consumer payments to pay for:

• Natural resources, labor, capital• Businesses sector is much smaller than

consumer sector.

• #2 How does specialization increase production?

• Specialization – concentrating on goods and services you produce better than anyone else.

• Specialization is efficient.• When everybody concentrates on what they

do well resources are saved and more is produced.

p.432 #2-6

• #2 Do consumers earn their income in the product market or the factor market?

• Consumers earn their income in the factor market.

• #3 Name three things that government produces.

• Three things that government produces are national defense, public housing, public transportation.

• #4 In what industries or businesses does your community specialize? Why?

• Seafood industry – we are close to the Gulf of Mexico, and South Louisiana has many marshes and lakes.

• Oil industry – we are close to the Gulf of Mexico where oil has been found.

• Tourism – South Louisiana is old, cultural, and very historic.

• #5 Describe three different transactions that could take place in the product market?

Product Market

Families buying groceries

Buying jeans from the mall

Buying a new car

• #6 Study the chart on p.429. As a consumer, what role do you play in the circular flow of economic activity?

• A consumer exchanges labor for income and income for goods and services.

Labor (work, job, career)

Income (money)

Goods and services (buy stuff)

You

Bellringer #9 4/15/13

• Answer the following in a complete sentences.• Do not look in the text or your notes for an

answer.• “Explain everything you know about

specialization”

Capitalism and Free Enterprise• Adam Smith – Scottish philosopher and

economist.• The Wealth of Nations (1776)• “invisible hand” controls the economy.• When individuals are left on their own they

will work for the own self-interest.• Individuals would use resources efficiently

and thus achieve maximum good for society.

Things you need to know before you read!

• Capitalism• Private citizens own and use the factors of

production - to seek profit.• Free Enterprise• (American economy) Competition is allowed

to flourish with a minimum of government interference.

• Consumer sovereignty• The word sovereignty refers to “a king or a

queen”

• The consumer is king of the market!

• The consumer determines which products will be produced.

Things you need to know before you read!

• Private property rights

• We have the freedom to own and use our property as we choose

• As long as it doesn’t interfere with the rights of others.

Things you need to know before you read!

• Profit motive

• The driving force that encourages individuals and organizations to improve their material well-being

• Responsible for the growth of the Free Enterprise system

Things you need to know before you read!

• Voluntary exchange

• The act of buying and selling freely and willingly.

Things you need to know before you read!

Today’s assignment

• Partner read pp.434-437• Reading counts as a 10 point assignment

grade.• Answer in complete sentences p.437 #2-6.

Bellringer #10 4/16/13• Academic Vocabulary. Choose the word that

has the closest meaning to the underlined word. Write down both words.

#1 It is this one mechanism that seems to throw the whole system into disarray.

a. Technique b. Group c. Method

#2 I would complete my homework sooner if I had a more immediate incentive.

a. Motivation b. Challenge c. Rule

p.437 #2-6• #2 What is a free enterprise economy?• A free enterprise economy is an economy where

competition flourishes.

• How does consumer sovereignty affect the free enterprise system?

• Consumer sovereignty affects the free enterprise system because consumer decisions determine what products businesses will produce.

• #3 What are the limits of private property rights?

• The limits of private property rights are to make sure that they don’t interfere with the rights of others.

• #4 What economic choices will you be free to make upon graduating from high school?

• College? Technical school? Work force?

• Where will you live? How will you afford to live there?

• Car?

• Pay for expenses?

#5 Advantages and Disadvantages of

competition to buyers and sellers.

competition

advantages

disadvantages

buyers

sellers

buyers

sellers

Keeps the cost of production

low. (efficient)

Keeps prices low.

Must compete against other

buyers

Forces some out of business!

• #6 Create a caption for the photo on p.436.• In your caption, indicate how the photo

illustrates the characteristic of voluntary exchange.

• Let’s here’em

Section 3 Wrap Up 4/16/13

• Answer in complete sentences.• #1 What is laissez-faire economics?

• #2 What are the major features of free enterprise?

• #3 What are some of the freedoms of free enterprise.

Bellringer #11 4/17/13

• Answer the following in a complete sentences.• Do not look in the text or your notes for an

answer.• “What is consumer sovereignty?”

The Economy and You

• Consumer Rights and Responsibilities• With every right comes certain responsibilities• Find out as much as you can about a product!• Why? Recognize good quality.• Where can we get the best value for our

money?• Don’t rely on stores and businesses to protect

you!

Protecting consumer rights

• “Caveat emptor” – Latin phrase• Means – “let the buyer beware”

• Consumerism• A movement to educate buyers about the

purchases they make.• A movement to demand better and safer

products.

Consumer Bill of Rights

• The right to a safe product• The right to be informed• The right to choose• The right to be heard• The right to redress (manufacturers payment

for damages)

Terms

• Warranty • The promise made by a manufacturer or a

seller to repair or replace a product within a certain time period.

Terms

• Disposable income• The money a person has left after all the taxes

have been paid on it.• Discretionary income• The money left over after paying for

necessities (food, clothing, and housing)

Terms• Charge account• Line of credit in a particular store for regular

customers.• Credit card• Consumers pay interest or fees. You get a

monthly bill.• Debit card• Payments immediately withdrawn from your

account.

Terms

• Interest• The payment people receive for lending their

money or allowing someone else to use their money.

Today’s assignment

• Partner read pp.438-442• Reading counts as a 10 point assignment

grade.• Answer in complete sentences p.442 #2-4,6.

p.442 #2-4,6

• #2 What private and federal help can you receive as a consumer?

• Consumers can receive help from the Better Business Bureau (BBB), and many federal agencies provide consumer information. The BBB provides information on producers.

• #3 What kinds of products are purchased with disposable income?

• Necessities such as food, clothing, and shelter are purchased with disposable income.

• #4 Why do some people buy brand-name products and other people buy generic products?

• People purchase brand name products because they insure consistent quality.

• People purchase generic products because they offer savings.

Brand Names vs. Generics

• #6 Look at the cartoon on p.431. Are the goods being purchased necessities (needs) or are they discretionary (wants)? Explain.

• The goods appear to be luxuries so they are discretionary purchases.

Ticket out of the door

• Don’t use any notes or books.• Do the best you can.• What are the four factors of production?