Production

Survey of Social Studies

Economics

Mr. BiddleArtwork of Caleb 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 resources-landforms, 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