pRODUCTION. It don’t come for free!. Quick Check-In. What is the Tragedy of the Commons? What is it’s relevancy to you and I?. 1.3.1 Define each of the productive resources (natural, human, capital) and explain why they are necessary for the production of goods and services.(k).
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It don’t come for free!
What is the Tragedy of the Commons?
What is it’s relevancy to you and I?
1.3.1 Define each of the productive resources (natural, human, capital) and explain why they are necessary for the production of goods and services.(k)
Natural resources: wood, minerals, water, animals, plants, etc.
Human resources: labour, ideas, intelligence, body tissues, etc.
Capital: private money, bank loans, investments
Primary sector: The primary sector of the economy extracts or harvests products from the earth. The primary sector includes the production of raw material and basic foods.
Secondary sector: The secondary sector of the economy manufactures finished goods. All of manufacturing, processing, and construction lies within the secondary sector.
Tertiary sector: The tertiary sector of the economy is the service industry. This sector provides services to the general population and to businesses.
Quaternary sector: The quaternary sector of the economy consists of intellectual activities. Activities associated with this sector include government, culture, libraries, scientific research, education, and information technology.
THIS WILL BE ON A QUIZ, TEST, MIDTERM AND EXAM – KNOW IT, BREATHE IT, MAKE IT YOUR NEW BFF!
Increasing returns: The stage of production in which adding inputs (resources) increases both the total product (how much you make) and marginal product (the difference in value between this product and the last one.)
Diminishing returns: The law of diminishing returns states that initially adding inputs (resources) to the production process yields increasing amounts of output (product). However, after a certain point, adding inputs (resources) increases output at a diminishing rate until eventually adding inputs actually decreases output.
To help with the pain here’s an example.
Picture a restaurant on a normal buiness day. Assume you are the manager resonsible for scheduling workers, but you have no experience and are a little slow at figuring things out.
You immediately call up one of your employees and have her rush to work. employee 1 is able to prepare the food, serve it, and then act as a cashier for the transaction. Later, as more customers arrive and begin demanding service, it becomes obvious to you that more help is needed.
Taking out your cell phone, you call up Employees 2 and 3 and order them to work. As they settle in and begin working, a division of labour develops, which increases their individual productivity and the total productivity of the restaurant.
Witnessing the marvelous outcome, you conclude that more is always better and decide to call up Employees 4 through 7. As they begin to work, you notice that the restaurant is able to serve more customers, but the early gains in productivity are beginning to dimish.
You chalk up these diminishing gains as a fluke, and in order to break through this impasse you bring Employees 8 through 256. Pretty soon, the restaurant's kitchen is full of employees, with every worker pretty much immobilized like a sardine in a can. The customers are now outrages at the extremely slow service and a little freaked out by your lack of management ability. As a matter of fact, with 256 workers, you are unable to produce anything. This is referred to as negative returns.