Extending comprehension competency focus

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Answering WHY questions: Speak up your mind.

1. Why are scarcity and choice basic problems in economics?

2. Why does a big percentage of new business enterprises fail?

3. Why is technology sometimes added to the list of factors of production?

Critical thinking (Discussion competency): Discuss the following questions in groups/pairs.

(1) Write down your opinion in note form;

(2) Prepare for discussion: revise the speech formulas

- for agreement/disagreement (You are right here. I agree. It’s true.

I disagree completely. I don’t agree. You are wrong.)

- clarification of points (Do you mean…? Do I understand correctly

that..?)

- eliciting information (One point is not clear to me…; Can you

tell me something about..?)

- interrupting (Could I say something on that point? Excuse me,

but…; May I add something?)

1. Do you agree with the opinion that land as a factor of production differs from other factors of production? Produce your arguments.

2. Can information be considered one of the factors of production in a modern society?

Exploring issues: List three examples of land in your region.

1. __________________________

2. __________________________

3. __________________________

Solving problems and finding solutions:

1. Write one strategy that government can use to encourage entrepreneurship among their citizens.

2. How do nations get wealthier even when available land diminishes over time?

Reviewing: Watch video “The Factors of Production”. Have you learnt anything new about scarce resources? Answer the following questions:

1. What is intellectual capital?

2. What is social capital?

3. Why do economists sometimes focus their attention only on two factors of production? What are they?

4. What is the production function?

Applying information:

In a market economy individuals are free to choose the way they will make a living. The following passage shows how one entrepreneur made a profit in a market economy. Use the information from the text to complete the exercises below.

Levi’s Jeans

In 1850 a 20-year-old immigrant named Levi Strauss sailed for San Francisco. He planned to sell goods to miners who were digging for gold in California. By the time Strauss arrived in San Francisco, however, he had sold most of his goods to other travelers headed for the gold fields. All he had left was canvas, which he planned to sell for making tents.

When Strauss reached the gold fields, he found that the miners needed tough pants. So instead of selling tents, he hired tailors to make his canvas into trousers. Word spread quickly that Strauss’ pants were durable, and soon the new pants were in great demand.

Convinced that his product would remain popular, Strauss went into business with his brothers, Jonas and Louis. They founded Levi Strauss and Company in 1853. The brothers bought a building and converted it into a factory. They

purchased scissors, sewing machines, needles, canvas, thread, and snaps. Finally, they hired workers to cut, sew, and deliver the jeans to stores. Today Levi Strauss & Co. has production plants around the world and sells more than a billion dollars in jeans each year.

Ex. 1. You have learned about the factors of production, or the resources needed to produce goods and services. List the major resources that the Strauss brothers needed to make canvas trousers, or jeans.

Ex. 2. All resources fall under the following categories: land (includes natural resources that are used to make a product); labor (made up of the workers); capital (including tools, buildings, and equipment(; entrepreneurship (the ability to combine the other three resources to make or improve a product or service). Place each resource you listed in Exercise 1 under the correct heading in the chart.