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400 words limit

1. List and define/describe the Factors of Production and pick a specific product that you use. Explain how the factors of production work together to make the product available.

Notes

The Factors of Production are basic resources that are the building blocks of an economic system, including:

natural resources: minerals, lumber, water, land

labor: human production, expertise

capital: money needed to run a business that comes from investment, borrowing, or sales

entrepreneurs: the people who organize and manage the factors of production in a business environment in order to produce a profit, risking failure and loss

of information: (now often included) – specialized knowledge, economic data

2. Explain in your own words GNP and GDP. Are these different from each other, why?