KEY ELEMENTS OF

ECONOMIC ACTIVITY
KEY ELEMENTS OF ECONOMIC
ACTIVITY
A. Human Wants
B. Economic Resources
C. Techniques of Production
• A. Human wants - Economic activity is directed toward
the satisfaction of human wants. These provide the
driving and motivating force whose fulfillment may be
thought of as the end or goals of economic activity for
the general public, those of government leaders, and
others.
• Two characteristics of human wants:
(1). They are varied, and
(2) In the aggregate, over time, they
are insatiable.
ORIGIN OF WANTS
1. Wants arise for what the human beings must have in order to continue
functioning.
2. Wants arise, too, from the culture in which we live, for every society
dictates certain requisites for the “good life”.
3. Satisfying of our biological and cultural needs require a wide variety of
goods. Individual tastes vary and are different.
4. Wants are generated by the activity necessary to satisfy other wants; or
want-satisfying activity may be said to create new wants.
• B. Economic resources - the things which are needed to
carry on the production of goods and services to satisfy
human wants; also called as the factors of production or
inputs of production. They are the most basic resources and
tools used in the production of goods and services. These
resources are classified into:
FACTORS OF PRODUCTION

• Land
• Labor
• Capital
• Management or Entrepreneurial ability
• Land – all natural resources including land, everything
beneath and above it; minerals, water, air, trees,
poultry, livestock, and all other forms of animal and
vegetative life. They are either the raw materials used
in production or the sources of these raw materials.
• Labor – all human resources who extract raw
materials, processed these raw materials into finished
consumption or investment goods, transport and sell
raw materials or finished products or are engaged in
services and professions.
• Capital – materials such as machinery and equipment
which man uses to extract and process raw materials
into finished goods. In a strict sense, capital only
refers to man-made materials used to produce other
goods.
• Management or entrepreneurial ability – a human resource
which organizes the other factors of production (land,
labor, and capital) to generate goods and services which
can satisfy the needs of man. He may also be the manager
of a business establishment or any of its divisions seeing
to it that the resources are well organized into productive
units.
ACTIVITY
IDENTIFY WHAT FACTOR OF
PRODUCTION:
1.Rainwater
2.Workers in the ricefield
3.Irrigation system
4.3 hectares of Land
5.Carabao
6.Inorganic Fertilizer
7.Owner of the ricefield
• C. Techniques of production - together with quantities
and qualities of resources in existence, these limit the
level of output that an economy can achieve.
Techniques of production are the know-hows and the
physical means of transforming resources into want-
satisfying form.