• Land• Labor• Capital –Physical Capital–Human Capital
Understand the differences between the 3 Factors.
Land
• Natural resources that are used to make goods and services
Labor• The effort that people devote to a
task for which they are paid
Capital• Any human-made resource that is
used to create other goods and services
Understand the difference between physical and human capital.
• Physical Capital–Machines, tools, and buildings that are used
to produce other goods and services
• Human Capital– Skills and knowledge gained by a worker
through education and experience
• “Human capital is as much a part of the wealth of nations as factories, machinery, and other physical capital.”
Economist - Gary Becker
Support your opinion on which is more important
to a nation’s economy, physical or
human capital.
Explain how a business would
use the 3 Factors of
Production to make a product.
Identify and explain the importance of at least 3 personal characteristics common to
successful entrepreneurs.
Evaluate the importance of entrepreneurs in our society.
Discuss the “Economizing Problem” that
causes scarcity.
• “We have UNLIMITED WANTS, but LIMITED RESOURCES.”• This causes the scarcity of
everything.
Explain situations in your life that
involved opportunity costs
and be able to identify and explain why they are your opportunity costs.
• Opportunity Cost–The most desirable alternative given
up when a making a decision.
Explain the economic reasoning behind a making a choice.
• Whenever people decide whether the benefits of a particular action are likely to outweigh its costs, they engage in a form of benefit-cost analysis....• Benefit > Cost–Do It!!!
• Benefit < Cost–Don’t Do It!!!
Explain what an incentive is.
• A reason for doing something• 3 types from Freakonomics
•Moral–one acts out of conscience or
conviction•Social–actions are related to shame
•Economic–people act in their financial interest.
Provide examples of
how incentives affect people’s
decisions.
Construct a correctly
labeled a PPC curve.
Cons
umer
Goo
ds
Capital Goods
Illustrate where a society is operating
efficiently in regards to the
PPC curve.
Cons
umer
Goo
ds
Capital Goods
A B
C
D
Illustrate where a society is
underutilizing its resources in regards to the
PPC curve.
Cons
umer
Goo
ds
Capital Goods
X
Illustrate where a society is
operating at an unsustainable
level in the short run in regards to the PPC curve.
Cons
umer
Goo
ds
Capital Goods
U
Identify 3 reasons why a PPC curve may
shift.
• Change in Quantity of Resources Available– Increase in Quantity; Curve shifts to the Right
• Change in Quality of Resources Available– Increase in Quality; Curve shifts to the Right
• Change in Technology– Increase in Technology; Curve shifts to the Right