1. Goods and Services Goods = physical objects Services = actions or activities that one person performs for another

2. List all the Goods and Services you can think of in our economy • GOODS • SERVICES

3. Factors of Production The resources that are used to make all goods and services Economists identify Four Factors of Production: Land, Labor and Capital (Physical and Human)

4. Land • All natural resources (materials found in nature) used to produce goods and services.

5. Labor • The effort a person devotes to a task for which the person is paid.

6. Capital • Any human-made resource used to produce other goods and services • There are two types: physical and human

7. Physical Capital • Human-made objects used to create other goods and services

8. Human Capital • Knowledge and skills a worker gains through education and experience

9. Chocolate Chip Cookies Partner Activity • Imagine an alien from Mars just arrives on earth and has developed a taste for Chocolate Chip Cookies • Make an extensive list of EVERYTHING needed to produce chocolate chip cookies. • Label each thing you listed as one of the four factors of production.

10. Chocolate Chip Cookies Partner Activity

11. McDonald’s French Fries Partner Activity • Make an extensive list of EVERYTHING needed to produce McDonald’s French Fries • Label each thing you listed as one of the four factors of production.

12. Choose a product that you use frequently. Write a paragraph in which you explain the production of this product. Specifically identify each of the four factors of production