Productive Resources & Entrepreneurship

In a market economy, individuals are free to choose the way they will make a living. The following passage shows how one entrepreneur filled a need and made a profit in a market economy.

LEVI STRAUSS

 

In 1850, a 20-year-old immigrant named Levi Strauss sailed for San Francisco. He planned to sell goods to miners who were digging for gold in California. By the time Strauss arrived in San Francisco, however, he had sold most of his goods to other travelers headed for the gold fields. All he had left was canvas, which he planned to sell for making tents. 

 

When Strauss reached the gold fields, he found that the miners needed tough pants. So instead of selling tents, he hired tailors to make his canvas into trousers. Word spread quickly that Strauss’ pants were durable and soon the new pants were in great demand. 

 

Convinced that his product would remain popular, Strauss went into business with his brothers, Jonas and Louis. They founded Levi Strauss and Company in 1853. The brothers bought a building and converted it into a factory. They purchased scissors, sewing machines, needles, canvas, thread and snaps. Finally, they hired workers to cut, sew and deliver the jeans to stores. Today Levi Strauss & Co. has production plants around the world and sells more than a billion dollars in jeans each year. 

 

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1. You have learned about the factors of production or the resources needed to produce goods and services. List all the major resources that the Strauss brothers needed to make jeans.
2. All resources fall under 1 of 4 categories. Land: Natural Resources to make a product. Labor: Workers. Capital: includes tools, buildings, and equipment. Entrepreneurship: the ability to combine the other 3 resources to make or improve a product or service. List each resource as Land, Labor or Capital. 
3. Did the Strauss brothers possess entrepreneurship? Explain.