The factors of production are resources that are the building blocks of the economy; they are what people use to produce goods and services. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. Show
The first factor of production is land, but this includes any natural resource used to produce goods and services. This includes not just land, but anything that comes from the land. Some common land or natural resources are water, oil, copper, natural gas, coal, and forests. Land resources are the raw materials in the production process. These resources can be renewable, such as forests, or nonrenewable such as oil or natural gas. The income that resource owners earn in return for land resources is called rent. The second factor of production is labor. Labor is the effort that people contribute to the production of goods and services. Labor resources include the work done by the waiter who brings your food at a local restaurant as well as the engineer who designed the bus that transports you to school. It includes an artist's creation of a painting as well as the work of the pilot flying the airplane overhead. If you have ever been paid for a job, you have contributed labor resources to the production of goods or services. The income earned by labor resources is called wages and is the largest source of income for most people. The third factor of production is capital. Think of capital as the machinery, tools and buildings humans use to produce goods and services. Some common examples of capital include hammers, forklifts, conveyer belts, computers, and delivery vans. Capital differs based on the worker and the type of work being done. For example, a doctor may use a stethoscope and an examination room to provide medical services. Your teacher may use textbooks, desks, and a whiteboard to produce education services. The income earned by owners of capital resources is interest. The fourth factor of production is entrepreneurship. An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. The most successful entrepreneurs are innovators who find new ways to produce goods and services or who develop new goods and services to bring to market. Without the entrepreneur combining land, labor, and capital in new ways, many of the innovations we see around us would not exist. Think of the entrepreneurship of Henry Ford or Bill Gates. Entrepreneurs are a vital engine of economic growth helping to build some of the largest firms in the world as well as some of the small businesses in your neighborhood. Entrepreneurs thrive in economies where they have the freedom to start businesses and buy resources freely. The payment to entrepreneurship is profit. You will notice that I did not include money as a factor of production. You might ask, isn't money a type of capital? Money is not capital as economists define capital because it is not a productive resource. While money can be used to buy capital, it is the capital good (things such as machinery and tools) that is used to produce goods and services. When was the last time you saw a carpenter pounding a nail with a five dollar bill or a warehouse foreman lifting a pallet with a 20 dollar bill? Money merely facilitates trade, but it is not in itself a productive resource. Remember, goods and services are scarce because the factors of production used to produce them are scarce. In case you have forgotten, scarcity is described as limited quantities of resources to meet unlimited wants. Consider a pair of denim blue jeans. The denim is made of cotton, grown on the land. The land and water used to grow the cotton is limited and could have been used to grow a variety of different crops. The workers who cut and sewed the denim in the factory are limited labor resources who could have been producing other goods or services in the economy. The machines and the factory used to produce the jeans are limited capital resources that could have been used to produce other goods. This scarcity of resources means that producing some goods and services leaves other goods and services unproduced. It's time to test your knowledge with a little game I like to call, Name That Resource. I will say the name of an item and you will identify it as one of the four possible resources that form the factors of production: land, labor, capital, or entrepreneurship.
It's time to wrap things up, but before we go, always remember that the four factors of production - land, labor, capital, and entrepreneurship - are scarce resources that form the building blocks of the economy. Presentation on theme: "Entrepreneurs An entrepreneur is a person who takes a risk to produce goods and services in search of a profit Entrepreneurs are valuable to the economy."— Presentation transcript: 1 Entrepreneurs An entrepreneur is a person who takes a risk to produce goods and services in search of a profit Entrepreneurs are valuable to the economy because they introduce creativity and help businesses adapt to changing conditions © 2015 Brain Wrinkles
2 Entrepreneurs A _______ is left after a company pays all of its expenses. A person who sees a need for a good or service and starts a business to provide it is called an ___________________. When a
person starts a new business, he or she takes a ________ that it might fail and they might lose their investment. An entrepreneur’s major goal is to generate a _______. Two ways entrepreneurs are valuable to the economy? © 2015 Brain Wrinkles
3 Personal Finance Money Management Choices SS6E4 & SS7E4
4 Standards SS6E4 The student will explain personal money management choices in terms of income,
spending, credit, saving, and investing. SS7E4 The student will explain personal money management choices in terms of income, spending, credit, saving, and investing. © 2015 Brain Wrinkles 5
Money Management Everyone makes choices about how to manage his or her money. The personal money management choices that you make will have a significant impact on your life. It is really important to develop good money habits sooner rather than later! The process of projecting, organizing, monitoring, and controlling future income and expenses is known as personal finance.
6 Money Money is the medium of exchange used to buy goods and services. 7 Forms of Money Debit Card Coins Check Currency © 2015 Brain Wrinkles
8 Income People earn an income by giving their time and services to an employer in an exchange for money. Income is the money that you make from your
job. Your income provides you with the money that you can save or spend on whatever you want. © 2015 Brain Wrinkles 9
Spending Your income provides you with the money that you can choose to spend now on goods and services. When you spend your income, you are trading your money in exchange for goods or services. Expenditure - an amount of money spent, as a whole or on a particular thing © 2015 Brain Wrinkles
10 Budget To help people make decisions about their income, a budget can be developed. A budget is a saving-spending plan that is based on a person’s income and estimated expenses. ©
2015 Brain Wrinkles 11 Saving You may also choose to save money from your income for the future. Your savings is the amount of money that you have not spent after buying the things that you
want or need. It is a good idea to save money so that you have it in case of an emergency (emergency funds for unexpected expenses). Typically, you put your savings into a bank account, but there are other ways that you can choose to invest your money. © 2015 Brain Wrinkles 12 8 Reasons to Save Emergency Funds (unexpected expenses)
13 Investing Investing is how you make your money grow, or appreciate, to gain a financial return. You can increase your money by investing in many different ways:
stocks and bonds, real estate, collectibles, businesses, etc. Investing means postponing current consumption in order to pursue an activity with greater benefits in the future. Basically, after a period of time, you should get more money than you put in due to interest. © 2015 Brain Wrinkles
14 Credit People use credit to buy something now and pay for it later. 15
2 Forms of Credit Bank Loan Credit Card © 2015 Brain Wrinkles
16 Credit While credit is extremely useful to the economy, excessive borrowing can be a problem
for people, businesses, and the government. Credit should not be used to pay for goods or consumption in the present that were completely consumed in the past. © 2015 Brain Wrinkles 17 4 Reasons to Go into Debt
1.) Mortgages (purchasing a home)
18 Risks of Debt -making payment on a loan even when you are not financially able -Credit ratings can be negatively
affected -Bankruptcy: a legal proceeding involving a person or business that is unable to repay outstanding debts -Job dismissal -Stress-related physical effects: stroke, hypertension, mental health issues © 2015 Brain Wrinkles
19 Key Terms 1.Expenditure - an amount of money spent, as a whole or on a particular thing. 2.Income - the amount of money a person earns during a year. 3.Investing - using
money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. 4.Saving - setting aside of income for future use. 5.Spending - the amount a person purchases. 6.Budget - a plan for spending 7.Bankruptcy - a legal proceeding involving a person or business that is unable to repay outstanding debts. 8.Credit - an amount of money loaned to a person that must be paid back along with additional
interest. 9.Debt - an amount of money borrowed by one party from another party. 10.Interest - an additional amount you pay to use borrowed money 20 Snapchat Directions Choose a well-known fairy tale or holiday character and create a Snapchat profile (profile picture, username,
location, and interests) for him/her. Next, create 3 snapchat messages about the character’s personal money management choices. Each message should include a picture of the scenario, as well as text to describe what vocabulary term the character is experiencing. For example, one of Santa’s snapchat messages could show him investing in real estate in sunny Miami. The next message could show his budget with specific amounts for cookies, reindeer food, dry cleaners for his
suit, etc. And the final message could show him taking out a bank loan to purchase a new sled (credit). © 2015 Brain Wrinkles 21 Personal Finance Snapchats 22 Tweet All About It Tweet All About It What is a person who takes risk to produce goods and services in search of profit?A person who undertakes the risk of starting a new business venture is called an entrepreneur. An entrepreneur creates a firm to realize their idea, known as entrepreneurship, which aggregates capital and labor in order to produce goods or services for profit.
Is a person who takes a risk to produce goods and services in search of profit Mcq?POST: An entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur is an agent of change.
In which type of organization does one person take all the risk?
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Is a person who takes a risk to produce goods and services in search of profit entrepreneur employee police?
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