Factors of Production

1. Land: Natural resources
2. Labor: work exerted
3. Capital
1. Human: When people acquire skills and knowledge through experience and education.
2. Physical: Money, tools, buildings, equipment, and other non-human assets.
4. Entrepreneurship
1. Risk taker and innovative
2. Leaders
5. Trade-off: an alternative that we sacrifice when we make a decision.
6. Opportunity cost: the best alternative of a trade-off
7. Guns or butter: trade-offs of the government
8. Thinking at the margins: deciding whether to add or subtract one unit of a resource.
9. Production Possibilities Graph= PPCurve= PPFrontier
1. Shows alternative ways to use an economy's resources.
2. On the attainable curve is efficient.
3. Below attainable curve is attainable, but inefficient (underutilization).
4. Above the curve is unattainable in the present (with the future production)
5. 4 key assumptions
1. Only 2 goods can be produced
2. Full employment of resources
3. Fixed resources
4. Fixed technology 
10. Efficiency: using resources so they're not wasted and maximizes production. Increases profits also.
11. Underutilization (inefficient): using less resources than the country can use. Decrease in profits.