4 Factors of Production

economics

the study of how individuals, families, businesses, societies, and countries…use their limited resources to satisfy their unlimited wants and needs

scarcity

not the same as shortage

there is never an unlimited supply of anything

all goods and services are finite

needs

essential things: food, clothing, shelter

wants

nonessential items: consumer goods, luxuries

Goods and Services

needs and wants can be satisfied by two things

4 factors of production

land

labor

physical capital

human capital

land

anything from the earth

labor

any sort of unskilled work

physical capital

anything man-made that is used to create goods and services

human capital

education, knowledge, training, experience, and entreprenuership