Transcript Production
Production Artwork of Caleb Biddle Survey of Social Studies Economics Mr. Biddle The 3 Branches of Industry 3 Branches of Industry Production Distribution Consumption • Production- the application of tools and a processing medium to the transformation of raw materials into finished goods for sale The 3 Branches of Industry • Distribution- the process between the Manufacturer and retailer, where goods are delivered to various places and areas • Getting your goods from the factory to the store The 3 Branches of Industry • Consumption- the final use of goods and services to provide utility • The buying and consuming of the product Productivity • The single most important determinant of a nations standard of living is the productivity of its resources Three Factors of Production • Factors of Production are resources necessary to produce what people want or need • Land is the society’s limited natural resourceslandforms, minerals, vegetation, animal life and climate • Capital is the means by which something is produced such as money, tools, equipment, machinery, and factories. • Labor is the workers who apply their efforts, abilities and skills to production. Factors that effect Production • Technological Change • Investing in Capital Goods • Human Capital/Resources Technological Change • Technological change may increase production and employment by making products more affordable • Ex- the assembly line made automobiles more affordable to the average household • It stimulated production and employment in the auto industry Technological Change • Technological change can also lead to workers losing their jobs, or being displaced by a machine – You can train people to use machines to increase productivity in the work place Investments in Capital Goods • Capital Goods- include all human creations used to produce other goods and services • Ex- Factories, Machines, Tools, Trucks, and etc. Investments in Capital Goods • Investing in a capital goods increases productivity, because it makes you more efficient with your time Investments in Capital Goods • Investing in a capital good may take time and money, but it may be worth it in the long run – Buying a tractor helps farmers produce more goods • When a nation produces capital goods it leads to economic growth Human Capital/Resources • Labor is the resource most commonly used to measure productivity – Measure by hour, day, or week Human Capital/Resources • The resource most responsible for increasing labor productivity is capital • Capital- tools, equipment, and factories used in the production of goods and services Human Capital/Resources 2 types of Capital: Human Capital- the accumulated knowledge, skill, and experience of the labor force - As workers acquire more human capital their productivity and income grow Human Capital/Resources Physical Capital- the same as capital good -any good that is used to produce a final product Federal Reserve • Gov’t organization that monitors the Economy Duties • Regulate the monetary supply and interest rates • Lend money to banks • Advise the President and Congress on economic decision making Trickle Down Economics • The idea in American Politics that tax breaks to big businesses and the wealthy will benefit poor individuals and the economy as a whole • Money will trickle down to the poor Also referred to as Reaganomics