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Click here to advance to the next slide. Read to Learn. Explain how scarcity requires individuals and nations to make decisions about resources. Describe the four factors of production. The Main Idea.

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Read to Learn

  • Explain how scarcity requires individuals and nations to make decisions about resources.

  • Describe the four factors of production.


The Main Idea

Both people and countries must deal with the problem of scarcity. Nations do not have enough factors of production to produce everything that their population wants. Factors of production are all the economic resources necessary to produce a society’s goods and services.


Key Concepts

  • Making Economic Decisions

  • Factors of Production


Key Terms

scarcity

the lack of resources

all the economic resources necessary to produce a society’s good and services

factors ofproduction


Key Terms

naturalresources

raw materials from nature that are used to produce goods

people who make the goods and services for which they are paid

laborresources


Key Terms

capitalresources

things used to produce good and services

resources used by the people who recognize a business opportunity and start a business

entrepreneurialresources


Key Terms

The process of recognizing a business opportunity, testing it in the market, and gathering the resources necessary to start and run a business

entrepreneurship


Key Terms

An individual who undertakes the creation, organization, and ownership of a business

entrepreneur


Making economic decisions
Making Economic Decisions

The principle of scarcity states that there are limited resources for satisfying unlimited wants and needs.

scarcity

a lack of resources


Graphic organizer
Graphic Organizer

When dealing with scarcity, it is important to think of the best way to use the item that is in short supply.

Demand

Supply


Factors of production
Factors of Production

There are four factors of production.

factors of production

all the economic resources necessary to produce a society’s goods and services


Graphic organizer1
Graphic Organizer

NaturalResources

LaborResources

CapitalResources

EntrepreneurialResources


Natural resources
Natural Resources

Natural resources can be processed in various ways to create goods.

natural resources

raw materials from nature that are used to produce goods


Graphic organizer2
Graphic Organizer

Renewable resources can be reproduced

Nonrenewable resources are limited

  • Wheat

  • Cattle

  • Coal

  • Iron

  • Oil


Being Resourceful

During the world oil crisis in 1973, Japan was able to reduce its dependence on oil and enhance productivity through conservation and alternate sources of industrial energy.


Labor resources
Labor Resources

Labor resources can be skilled or unskilled, physical or intellectual.

labor resources

people who make the goods and services for which they are paid


Capital resources
Capital Resources

Capital resourcesare also called capital goods.

capital resources

the things used to produce goods and services, such as buildings, materials, and equipment


Capital resources1
Capital Resources

Examples of capital resources include:

  • Delivery trucks

  • Supermarkets

  • Cash registers

  • Farm equipment


Entrepreneurial resources
Entrepreneurial Resources

Entrepreneurial resources meet society’s changing wants and needs.

entrepreneurial resources

resources used by the people who recognize opportunities and start businesses


Entrepreneurial resources1
Entrepreneurial Resources

Entrepreneurship is necessary when starting a business.

entrepreneurship

the process of recognizing a business opportunity, testing it in the market, and gathering the resources necessary to start and run a business


Entrepreneurial resources2
Entrepreneurial Resources

An entrepreneur accepts the risks and responsibilities of business ownership.

entrepreneur

an individual who undertakes the creation, organization, and ownership of a business


Entrepreneurial resources3
Entrepreneurial Resources

Entrepreneurial resources are individuals who start and direct businesses to produce goods and services to satisfy needs or wants.

Labor resources are people who produce the goods or services.


No nation has enough resources to satisfy all of its wants and needs.


Entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.


Answers will vary. Examples include water, oil, iron ore.


End of entrepreneurial resources.


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