Glossary

factors of production
Resources used to produce goods and services; frequently divided into
the basic categories of land, labour, and capital.

goods
Tangible products, such as cars or shoes.

services
Intangible products, such as legal services and education.

production
The act of making goods or services.

consumption
The act of using goods or services to satisfy wants.

opportunity cost
The value of the next best alternative that is forgone when one alternative
is chosen.

production possibilities boundary
A curve showing which alternative combinations of output can be
attained if all available resources are used efficiently; it is the boundary