Lesson 4A - Production Resources and Economic System

  • Lesson 4A - Production Resources and Economic System

    Learning Goals: 

    • Review of PPC,
    • Recognize tangible and intangible productive resources as a country’s real wealth
    • Understand production questions and make choices about how productive resources are owned and used
    • demonstrate an understanding of different economic systems (i.e., market, mixed, traditional, command) and answer the three fundamental economic questions about production (i.e., what, how, and for whom to produce)




    • Lesson Glossary

      Productive resources (or factors of production)
       Resources (such as land, labour, and capital) that are used to produce goods and services. 

      land
       A factor of production that includes all natural resources used to produce goods. 

      labour
       A factor of production comprising the physical and mental effort contributed by people to producing goods and services. 

      Capital
       A factor of production that refers to the machinery, factories, warehouses, and equipment used to produce goods and services. 

      Productivity
       A firm’s ability to maximize output from the resources available, usually measured as the firm’s output per worker. 

      Real capital
       A more precise term than capital for the machinery, factories, warehouses, and equipment used to produce goods and services. It is distinct from money capital. 

      Money capital
       The funds used to acquire real capital. E

      Entrepreneurship

       The contribution made by an owner, manager, or innovator who organizes land, labour, and capital to produce goods and services. 

      Tangible resources
       Physical resources (such as land and labour) that are necessary for production and are visible.

      Intangible resources
       Resources that are necessary for production, such as entrepreneurship, knowledge, and an environment for enterprise. Intangibles are not as visible as tangible resources, but they are no less important.  

      economic system
       The laws, institutions, and common practices that help a country determine how to use its resources to satisfy as many of its people’s needs and wants as possible. 

      barter
       The trading of goods and services without the use of a monetary system; such transactions are common in traditional economies.

      command economy
       An economic system in which production decisions are made by government-appointed central planners. 

      market economy
       An economic system in which production decisions are made by the actions of buyers and sellers in the marketplace. 

      private enterprise
       A term applied to the private ownership of productive resources, a characteristic of market economies. 

      mixed economy
       An economic system, such as Canada’s, that contains elements of market, command, and traditional systems. 

      Productivity
       A firm’s ability to maximize output from the resources available, usually measured as the firm’s output per worker. 


    • REVIEW

      The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, inefficiency, economic growth, and contractions.

      Efficiency
      the full employment of resources in production, efficient combinations of output will always be on the PPC.






    • Discussion Forum

      1. Why is political stability an important productive resource for an economy?
        


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