Econ - -Produce whichever goods they want to produce using...

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Factors of production Labor - Capital: financial capital, machine equipment, things that must be used in the production process to create products of worth e.g. office space, computers, crains - Capital is divided into financial capital [money] and other capital [land, natural resrouces, machines, buildings, machines used in production] Slide 7 chpt 2 Households - households own the factors of production [labor] - Own natural resources [land, metal, oil,] - Want to buy and consume (services Vs. Firms - Buy and rent factor of production and produce using this factor of production - Hire someone to work as a project manager, accountant,
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Unformatted text preview: -Produce whichever goods they want to produce using their comparitve advantage-Will sell these goods and services back to households Firms are receiving some revenue for the good they are selling This money comes from the household Slide 8 Chpt 2 Market for factors of production-need to hire workers, buy office space and land, -typically come from households Missing government-could be taxing firms and households that change the equation-Government provides benefits though that are also not in the equation Missing exports-Other countries that interact with firms and households in US Missing stock market...
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This note was uploaded on 10/23/2011 for the course ECON 002 taught by Professor Eudey during the Fall '08 term at UPenn.

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