3. THE RESOURCES NEEDED FOR PRODUCTION -
FACTORS OF PRODUCTION Factor of production: are all the resources used to produce goods and provide services. Three groups: 1. labour - It is the work done by humans to carry out an activity. - Some types are associated with: • •
-
2. Land -
Thongs that provided by nature that we use to obtain a profit. Different geographic areas have natural resources: • • • •
-
Skills and technical knowledge Experience and know-how.
Water Minerals Energy sources (oil, natural gas , Sun, wind, rivers…) Plants and animals.
3. Capital - The assets (activos) already produced or developed that can be then used to produce new producs and services. - Types: • • • •
Physical: capital goods, (buildings, machinery) Financial: money and investment Technological: technolog, research and development of new applications (R&D) and innovation (R&D&I) Human: worker can move from one place to another, taking skills, creativity and technological kowledge with them.
3. THE RESOURCES NEEDED FOR PRODUCTION THE IMPACT OF FACTORS OF PRODUCTION - Economic activity plays a role in transforming our physical surroundings. - Two types of impacts: 1. Positive impacts Some regions have many resources and for that reasons they have a economic growth. This economic growth: -
It is good for the wellbeing of population It produces a better standard of living
Examples: North America, Europe, parts of Asiaand the Pacific. 2. Negative impacts - Activities associated with extracting gas, oiland mineral deposits and forestry. - These activities have harmful effect on the environment that we call negative externalities. - They produce deterioration on the environmment. Types: 1. 2. 3.
Depletion on natural resources due to overexploitation Destruction of natural ecosystems Overloading the environment with waste (pollutants, harmful gases, ‌)