Goods vs Services
    Goods

• consumer goods- goods intended for final use
• capital goods- items used in the creation of other goods

Services-work that is being performed by someone else

Factors of production

1. Land- natural resources
2. Labor- work force
3. Capital-  Human capital: Knowledge and skill a worker gains through experience. Physical capital: human made objects used to create other goods and services
4. Entrepreneurship- risk takers and intensive

.Opportunity cost
  The most desirable alternative given up by making a decision.

Production Possibilities
Production possibilities Graph- Shows alternative ways to use resources
PPF- production possibility frontier
PPC-production possibility curve

Productive Efficiency Vs. Allocative Efficiency

• Productive Efficiency-produce resource at the lowest cost. At any point on the curve
• Allocative Efficiency-combination of most desired by society.\