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Productive Resourcesand allocation of those resources
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Standards• SSEF1b: Define and give examples of
productive resources
• SSEF1c: List a variety of strategies for allocating scarce resources
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What are Productive Resources?
• Anything used to produce goods and services
• 4 types of Productive Resources. We call them the
• “Factors of Production”• Or FOP’s• CELL• Capital,
Entrepreneurship, Land, Labor
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FOP: Land
• “Gifts of nature”• Anything that occurs
naturally
• Examples:
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FOP: Labor
• the physical abilities and time of human beings available to produce goods and services.
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FOP: Capital
• the tools, machines, and skills/knowledge/training of human beings.oPhysical Capital – tools, machines,
etc.oHuman Capital – skills, knowledge,
and/or training of individuals.
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FOP: Entrepreneurship
• someone who takes a risk to start a business by bringing together the other three factors of production in an innovative way.
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Allocating Scarce Resources
• Society has to decide how to allocate its scarce resources.
Allocate:To distribute (according to a plan)
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Allocation Strategies
• Authority• Governments make the
decision• Authoritarian
governments = use military/police for enforcement of resource allocation.
• Rationing of a resource• Supply/Demand• More supply = Lower
price• Less supply = Higher
Price
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Allocation Strategies
• Random Selection/ (Lottery)
• Everyone has an equal chance of getting resource
• Inefficient = resources go to those who don’t need it/want it.
• Ex: Farm land• First come/First Served• First in line gets the
resource:• Concerts• Sporting events• Stores
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Allocation Strategies
• Personal Characteristic
• Resources are distributed based on need or merit.
• i.e.: Scholarships, Jobs
• Contest• Resource go to the
person who wins.• i.e.: Race, Academics
(valedictorian), Test of knowledge
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Standards• SSEF1b: Define and give examples of productive
resources
• SSEF1c: List a variety of strategies for allocating scarce resources
• List 5 facts that will help you remember this lesson:
• • • • •