Unit 1

January 4

• Goods- Than-gable commodities 
• Consumer goods- goods intended for final use by consumer
• Capital goods- Items used in the creation of other goods
• Services- Work performed for someone

Factors of Production

• Land- Natural resources
• Labor- Work exerted
• Capital
• Human Capital- People acquire skill and knowledge through experience and education
• Physical Capital- Money, tools, buildings, and machines
• Entrepreneurship- Involves risk taking, combine the factors of production in order to be successful
• Trade off- An alternative that we sacrifice when we make a decisions.
• Opportunity Cost- Next best alternative
• Guns or Butter- Trade off that the government face when choosing whether to produce more or less military goods or consumer goods.