UNIT 1: January 6th, 2016

4 Factors of Production-

1. Land (Natural Resources)
2. Labor (Work Force)
3. Capital (Human/ Physical)
4. Entrepreneurship (Innovative/ Risk Taker)

Factor of Production-

resources required to produce goods/ services

Physical Capital-

tools, machinery, factory, robots

Human Capital-

knowledge, skills, abilities, talents gained through education an work experience.

Trade Offs- 

Alternatives we give up when we choose one course of action over another.

example: choosing cereal over waffles

Opportunity Cost- 

the next best alternative (Settling)

example: Asking the waitress for water, when she tells you there's no water you ask for sweet tea, when there's no sweet tea you ask for Coca Cola and finally receive it.