January 4, 2017

Factors of Production
1. Land- natural resoruces
2. Labor- work exerted
3. Capital
                 -Humans Capital is people acquire skills and knwolegde threw experience and education
                 -Physical Capital is money, tools, building, equipment, machinery
4. Entrepreneurship - innovative, risk taker,

Trade offs- a scarifice when we make a decsion  

Opportunity cost - most desirable alternative given up as a result of a decision
Guns or butter - refers to trade offs that nation face when choosing whether to produce more or less military or consumer goods

Thinking at the margins is deciding whether to add or subtract one additional unit of some resource