1. Identify and describe the five factors of production. In your opinion, which factor is the most important? Justify your decision. Labor (Human Resources)
In my opinion Physical Resources is the most important because if you do not have the physical equipment to provide the good or services that you’re selling then u have nothing to offer. I did not say capital because some things you do not need money (capital) to provide goods or services. Some companies these days merely just serve as a middle man for the big company to the consumers so in that case there really no labor or very little. Information Recourses wouldn’t be as important because, like I’ve mentioned, you really wouldn’t need this factor if you do not have the physical means to create the service or good. Example: You would not need money as much as you would need the physical tooling needs to repair engines for a trucking repair service. 2. In your own words, define the following terms:
* Demand curve- a graph that shows amount of product are wanted compared to the different prices of that product. * Supply curve- a graph that shows how much that product can be delivered compared to the different price of the product. * Equilibrium price- the price point of where the amount delivered and the amount of wanted are the same. * Gross Domestic Product- measurement of an product and good produce in a nation economy. * Real Gross Domestic Product GDP that has been compensate of currency and price changes * Inflation- when prices of everything rises in the economy 3. Supply and demand affects prices. Identify an instance in which a surplus of a product led to decreased prices. Identify an instance in which a shortage of a product led to increased prices. What eventually happened in each case and explain why it happened....