Economics: Human Resources, Natural Resources and Capital Goods

​What is Economics

Economics: The study of how people use resources to produce, distribute, and consume goods and services.

In simple terms, an economy refers to people making stuff and people buying and selling stuff.

​Important Terms

Economic Goods (Products): Physical objects that are useful, like cars and food.

Economic Services: Productive acts that are useful, like babysitting.

Economic Resources: Human resources, natural resources and capital goods.

​Economic Resources

Economic resources are apart of the production aspect of the four economic activities.

Producers transform natural resources, human resources and capital goods into more valuable goods and services for consumers.

Natural Resources

These are raw materials from nature that are used in the production of goods and services.

Human Resources

These refer to the workforce and the knowledge, skills, and labor people bring to the economy.

Capital Goods

These are man-made goods used in the production of other goods and services.

Match

Categorize each of the following as a natural resource, human resource or capital good.

• Computer

• Coal

• Engineer

Capital Good

Natural Resource

Human Resourceeee

• Capital Good

• Natural Resource

• Human Resourceeee

Match

Categorize each of the following as a natural resource, human resource or capital good.

• Truck

• Saleman

• Soil

Capital Good

Human Resource

Natural Resource

• Capital Good

• Human Resource

• Natural Resource

Match

Categorize each of the following as a natural resource, human resource or capital good.

• Water

• Bulldozer

• Teacher

Natural Resource

Capital Good

Human Resource

• Natural Resource

• Capital Good

• Human Resource

Match

Categorize each of the following as a natural resource, human resource or capital good.

• Power Plant

• Doctor

• Sunlight

Capital Goods

Human Resource

Natural Resource

• Capital Goods

• Human Resource

• Natural Resource

Economic Activities

Everyone relies on others to provide them with goods and services.

As a result, goods, services and resources flow from one person to another through economic activities.

Multiple Choice

The ultimate goal of all economic activity is ______________, which is the act of using goods and services.

• production

• distribution

• consumption

• exchange

Multiple Choice

Which economic activity is where producers transform natural, human, and capital resources into more valuable goods and services for consumers.

• production

• distribution

• consumption

• exchange

Multiple Choice

Which economic activity is refers to people who provide goods and services require some form of payment, usually in the form of money.

• production

• distribution

• consumption

• exchange

Multiple Choice

_____________ is the process or activity by which income is divided among resource owners and producers. Money received is known as income.

• production

• distribution

• consumption

• exchange

What is it Worth to You

In our society, resources, goods and services have different values. Consumers are willing to pay more for goods and services that bring them satisfaction.

Example: Bottle water is valued more that tap water.

​Value Attached to Money

The value we attach to money payments for resources, goods and services depends on three factors:
1. Productivity
2. Demand
3. Supply

​Productivity

Productive resources usually earn more money. For instance, fast computers are typically more highly valued (and, therefore, more expensive) than slow ones.

​Demand

As people’s desire for resources, goods, and services increases, so does the amount of money they are willing to spend. Consider Kobe Bryant memorabilia. In the months following the basketball star’s death, demand for Bryant collectibles increased. As a result, the money value of these mementos went up.

Supply

Resources, goods, and services that are not easily available are considered scarce. People are willing to pay more money for something that is scarce because people want it more. For example, gas prices rise when there is a short supply. People will pay high prices because they need gas.

​Supply and Demand

When supply is high and demand is low = prices decrease (low profits)



When supply is low and demand is high = prices increase (high profits)

Multiple Choice

When supply is high and demand is low = prices ???????

• increase

• decrease

Multiple Choice

When supply is low and demand is high = prices ???????

• increase

• decrease

Summary

• Goods, services, and resources must move from one individual to another.

• This movement is possible because of consumption, production, exchange, and distribution (four economic activities)

• The money values attached to these goods, services, and resources depend on productivity, demand, and supply.

​Activity - Lemonade Stand

For this activity you will act as the owner of a lemonade stand.
In the game, you will purchase economic resources to sell individual cup of lemonade.

​How To Play

Economic Resources = ice, sugar and cups

Be careful! You do not want to buy too many supplies because they could spoil. At the same time, you do not want to run out of supplies before your customers are done buying your lemonade.

​How To Play

Also, be sure to keep an eye out on the weather and how much money you have. Both should impact the amount of supplies you buy. 

Select the 7 day option to preview the game to get an idea of how to play the game. Your goal is to make as much money as possible!