IntroductionIntroduction
Does building a simple wooden yo-yo have anything in common with building an incredibly sophisticated nuclear power plant? It would seem to most that they have absolutely nothing in common. However, both yo-yos and nuclear plants require the same factors of production.
To build both items requires people. The people will require knowledge and physical labor. Both the yo-yo and nuclear power plant will require tools to be built. The yo-yo will require a lathe or chisel, while the power plant will need earth movers and cranes. To build both products will require resources from the earth. The wooden yo-yo will require trees while the power plant will require iron ore for the steel and sand for the concrete. The nuclear power plant will probably need some lumber from the same trees used by the yo-yo makers.
Finally, someone has to take the risk of purchasing some of those resources to make a specific product. The person who is willing to risk their own money, to make a product, is called an entrepreneur. Both the yo-yo makers and the builders of the power plant are taking a chance that people will actually buy their product. The specific skills of people, the tools required, and the necessary natural resources used in the making of a yo-yo or nuclear power plant are very different, but the factors of production are the same.
The earth is only so big and contains a limited amount of resources. Many businesses compete for the very same resources. These same businesses are trying to provide us with our unlimited desire for wants. The limits of the factors of production bring the problem of scarcity into focus. In this unit, you'll about how to classify those resources.
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Lesson Objectives
Following successful completion of this lesson, students will be able to:
The above objectives correspond with the Alabama Course of Study: Economics objective(s): 1, 1.2. |
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