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Scarcity
Unlimited wants, limited resources
Economics
Science of scarcity and study of choices
Positive statements
Facts, avoids judgements
Normative statements
Includes opinions
Land
natural resources
Labor
human effort which earns pay
Physical Capital
human-made resource to create goods and services, countries with more experience more future growth
Human Capital
knowledge and skills from school/experience which can increase productivity
Entrepreneurship
leaders combine factors of production to create goods and services and obtain profit
3 Economic questions
What should be produced, How should it be produced, Who will use it
Command economy
government owns all resources, low quality + variety, high cost bc no competition
Free market
individuals own resources, little government involvement, better quality and cheaper bc of competition and incentive to work
Mixed economy
free markets with some government intervention, most countries including US
Constant Opportunity cost
resources are easily adaptable for producing either good
Increasing Opportunity cost
as more of a good is produced, opportunity cost increases since resources are not adaptable for both
Productive efficiency
Products are produced in least costly way, any point on PPC
Allocative efficiency
Products produced are most desired by society, optimal point depends on society’s desires
Absolute advantage
producer that produces most outputs or uses least inputs
Comparative advantage
producer with lowest opportunity cost
Note 
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