Unit 1 - Business Basics
Learning Target 6: I can describe the core factors of production and how they affect the economy
How many and how efficiently businesses produce goods and services is how we measure the performance of our economy. These goods and services can range from computers to breakfast cereals to dry cleaning to banking services. A business must use a wide array of useful goods or services that are either consumed or used for further production in business. This wide array of useful goods and services are called outputs. In order for a business to achieve their organizational objectives and produce more goods and services they have to utilize their factors of the production. Every output a business produces requires at least two inputs or factors of production which a commodities or services that are used by businesses in their production processes. Simply put these factors of production are what business use to produce goods and services. The factors of production fall into four main categories. Natural resources, human resources, capital and entrepreneurship. These are also often referred as land, labor, capital and entrepreneurship. Click here to read more about factors of production. Watch the following video on the factors of production. After watching this video think of your favorite business and write down all the examples of the factors of production they use. Be prepared to turn your paper in as well as share with the class.
Make The Connection: What factor of production is the most plentiful where you live?
Show What You Know: Now that you have a better understanding of the factors of production, lets put the concept to work by creating your own island.