Introduction to economics three little pigs
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Transcript of Introduction to economics three little pigs
FACTORS OF PRODUCTION
SIXTH GRADE
BMS
FACTORS OF PRODUCTION1. Natural Resources –or land that has all the gifts of nature including:
– mineral deposits, water, arable land, vegetation, natural forests, marine resources, other animal life, the atmosphere and the sun. Minerals are a limited, non-renewable resource
2. Labor - (Human capital)– Quality
(knowledge) is better than quantity
3. Capital goods- items used to create goods & services
4. Entrepreneurship – innovators (creating new products)– The entrepreneur is the driving force behind production.– Entrepreneurs introduce new products and new techniques – Risk takers- the people who take chances. They do this
because they anticipate that they will make profits. But they may also suffer losses and perhaps bankruptcy.
THE THREE LITTLE PIGS•What do the Three Little Pigs have to do with economics?•Once upon a time…
http://www.youtube.com/
watch?v=Olo923T2HQ4
THREE LITTLE PIGS•What do you know about…
– Straw? – Wood? – Brick?
•What additional items are needed to build the houses?
•Who is needed to build the houses?
What is Human Capital?
• Training and education by taking classes and/or job experience that increases a persons value in the work place.
• Intelligence or physical skill• Training increases productivity• People with more education earn more $$• What are some examples of investing in
Human Capital?• Teachers invest in human capital
WHICH OF THE THREE LITTLE PIGS HAS THE MOST HUMAN CAPITAL?
This is a fictional story, so the pigs don’t need to be human to have human capital.
CAPITAL GOODS• Capital goods are tools used in the production of
other goods.• Some examples are factories, machinery, tools,
equipment• Capital goods are also any raw materials used to
manufacture goods and services.• Money is NOT a resource – Money is a means
or medium of exchange– Money is not worth anything by itself, its value is what
we can exchange the money for.
WHICH OF THE THREE LITTLE PIGS USED A CAPITAL RESOURCE TO BUILD THEIR HOME?
RESOURCE LISTSNatural Resources
Capital Resources
Human Resources
GDP: GROSS DOMESTIC PRODUCT
• Measure economic progress of a country
• Value of goods and services produced by a country’s economy during a specific year.
• Germany and the United Kingdom have two of the strongest economies in Europe so they have a high GDP.
• Russia and Ukraine are slowly working their way out of the effects of being a command economy under communist control for years.
Who would make more money each year: a doctor or a data entry worker?
• What would explain this?• Amount of education or investment in human
capital• The doctor is required 8+ years of education
after high school and earns $200,000 (average)• With data entry, only a high school degree is
required. The average salary being $26,000.
HOW TO INCREASE YOUR GDP
Invest in Human Capital
Example: Education, Training Invest in Capital
Example: Factories, Machinery, Computers Most countries in Europe have good education systems
and strong capital investments
Example: Germany invests in its human capital and capital good. It has one of the strongest economies. Ukraine’s educational systems suffered because there was little money for school. Russia did not invest in capital investments which left manufacturing plants with old, outdated technology and machinery.
ENTREPRENEURS
• They come up with new ideas and use human, capital, and natural resources to bring ideas to the marketplace.
• Entrepreneurs are willing to take risks to create the new product or service.
• Entrepreneurs are valuable because they introduce innovative products.
• European countries do not have as many entrepreneurs as the U.S. due to high taxes, government regulations, and job security.