Factors of Production

Factors of Production- the four resources needed to produce a good or service.

The pictures below show one tree as it makes its way through all four factors of production.

One tree's journey: first it is grown on the LAND, then it is cut down using CAPITAL (a machine), then it is inspected by a person, who is LABOR, and last it is sold in a BUSINESS

Question #1: Write the definition for Factors of Production

Question #2: Use the chart online to complete your chart below with all four factors of production and an example picture for each.

Land/Natural Resources

Materials found in nature that can be used for the economy; examples include minerals, forests, water, and fertile land.

Due to the Caribbean's natural resources of good land and access to water for fishing, most Central America and Caribbean Sea countries rely (depend) on agriculture as the primary source of making money. Agriculture creates employment (jobs) and is very important in international trade. However, the people who work in agriculture do not make very much money. This has led many Caribbeans to move from rural farms into urban cities to look for new opportunities.

Forests provide timber (wood) for many different economic activities

Minerals can be extracted (taken from the ground) to benefit a country's economy

Fertile land means the land has enough nutrients to grow crops like sugarcane.

Question #3: What natural resources do Caribbean islands have that cause them to rely (depend) on agriculture?

Question #4: Why are many Caribbeans moving from rural farms to urban cities?

Capital/Equipment

The machinery, tools, and buildings used to produce goods and services

There is very little industrial activity in the Caribbean Sea region. Although some U.S. companies have built factories in Puerto Rico and the Dominican Republic, and those two countries have experienced some industrial growth, the remaining island nations have had little industrial growth. Unless an island nation has natural resources such as oil or minerals, as is the case with Trinidad and Tobago, there are few opportunities to grow the manufacturing/industrial part of economy.

Clothing factory in Puerto Rico re-opens after Hurricane Maria

BP oil rig outside of Trinidad and Tobago

Question #5: Define “capital”

Question #6: What are the few countries with industrialism in the Caribbean Sea region?

Labor/People

The effort people put into producing goods and services to sell

Through tourism, the service sector employs a large amount of people both directly (like employees at hotels) and indirectly through agriculture (local farmers who grow food that tourists buy and eat). However, many of these service jobs are seasonal, meaning they only exist during certain times of the year, and the workers are paid low-wages. Also, money earned by businesses and hotels doesn't always help the GDP of Caribbean countries.

Why? Well the big money of tourism is from cruises and resort hotels. Cruise lines and fancy hotels are often owned by international companies (i.e. not Caribbeans). Also, many hotels buy food and cleaning supplies from outside of the Caribbean because it can be cheaper. Tourism is certainly beneficial to the economy, however, it would be better if the money earned helped develop the economies of Caribbean countries.

Housekeeping staff at a Jamaican hotel

Cruise ship docked in St. Thomas

A local Costa Rican leads this zipline tour through the rainforest

Question #7: List at least three examples of service jobs associated with tourism. (What do you pay for while on vacation that counts as service?)

Question #8: Why doesn't tourism help the people who live in the Caribbean more? (Who gets the money from tourism?)

Entrepreneurs/Businesses

A person who can combine land, capital, and labor to make a profit, usually by creating a new business

Most countries in the Caribbean Sea are developing economies, meaning they are relatively poor. The governments of these countries often lack the resources, or simply choose not to, provide high quality public education. This means that most people are stuck in agricultural and/or low-paying jobs, which leads to a lack of entrepreneurs. An entrepreneur is someone who starts up their own business, but you need an education to start a business. This can lead to the Cycle of Poverty:

1. Developing countries don't have enough money to spend improving education.

2. If people aren't educated, they do not have the knowledge and skills needed to start new businesses.

3. If no new business or innovation (new, better ideas) aren't happening, the economy will stay developing.

4. If the economy doesn't become more developed, the government won't have enough money to invest in education, and the Cycle of Poverty continues.

Question #9: Complete the flowchart on your notes using the information you read online

Reflection

Write at least 3-4 sentences answering the question below using examples from what you learned today. Write in complete sentences - use the sentence stems to help improve your writing.

What are some problems in the Caribbean due to the factors of production they have and are lacking?*

*hint: first check your notes to see which factor of production the Caribbean has A LOT of and which one they are LACKING


Sentence stems:

  • Some problems in the Caribbean are…
  • In the Caribbean, they have a lot of ____________________, but this can cause problems because…
  • Caribbean islands are lacking in certain factors of production, such as…
  • The lack of _____________________ is causing problems like…