You and your friends have been doing a good business at the hot dog stand you have been operating on weekends in a local parking lot. Sales are brisk! You have decided that, rather than just blowing your profits on a big party, to invest in a way to expand your business and -- you hope -- bring in even more profit. You have been selling 200 hot dogs each weekend at $1.00 each. Supplies cost you $100, and rent for your space in the parking lost was $25. You and a friend each spent five hours working at the stand. That means you have $75 left to divide between your wages, and money to invest in expanding your business. The more wages you pay yopurself and your helper, the less you will have to invest. Now that you know the definitions of the three factors that you need in order to produce wealth, perhaps this knowledge can help you approach this business decision.
Describe your plan for investing your hot-dog profits in the space below. Identify and evaluate specific investments in additional land, labor and capital -- and try to estimate, as best you can, how many additional dogs each option will allow you to sell, and how much profit the investment will bring in.