Module 1: Economic Systems in Canada and the United States
Section 1: Market and Mixed Economies
Lesson 2 - Page 2: Market Economy (ch 6)
Think about your needs and wants. Scarcity, in economic terms, occurs when there are unlimited wants and limited resources. Most things that people need or want are limited because there are limited resources available.
Factors of production are the resources needed to produce goods and services. The term production refers to the producing of goods and services. The resources of land, labour, and capital are called factors of production and used to produce the goods and services.
On your Issues for Canadians Definitions handout include the terms land, labour, and capital. As you examine the following definitions and illustrations, write your own definition for each term.
The first factor, land, refers to the natural resources or raw materials that are used to produce the goods and services found in the primary industry.
Factors of production are the resources needed to produce goods and services. The term production refers to the producing of goods and services. The resources of land, labour, and capital are called factors of production and used to produce the goods and services.
On your Issues for Canadians Definitions handout include the terms land, labour, and capital. As you examine the following definitions and illustrations, write your own definition for each term.
The first factor, land, refers to the natural resources or raw materials that are used to produce the goods and services found in the primary industry.
The first factor, land, refers to the natural resources or raw materials that are used to produce the goods and services found in the primary industry.
The second factor of production is labour, which is the work done by individuals. In secondary industry, labour would consist of turning raw materials into finished products.
Labour is also found in tertiary industry; labour includes services provided to society.
The third factor of production is capital. Capital includes the money, equipment, tools, and other resources required to produce the goods and services.
When producing goods, the producers combine the factors of production. When producers cannot produce enough of a good to meet the demand, scarcity is created.