Economics Glossary & Key Concepts (ECON-
GLO01), 2025/2026 – Complete Study Notes
the basic economic problem - Needs and wants are unlimited, but resources are scarce
scarcity - when there is not enough of something
resources - something that can be used to fulfill a need
economic goods - Goods that are scarce and therefore have an opportunity cost.
free goods - Goods that are not scarce, and are therefore available without limit.
public sector - the part of the economy that involves the transactions of the government
private sector - the part of the economy that involves the transactions of individuals and
businesses
economic agents - Firms, households, governments
the basic economic questions - 1. What to produce
2. How to produce
3. For whom to produce
a good - A physical product
a service - is an output that provides benefits without the production of a tangible product.
factors of production - Land, Labor, Capital, Enterprise
land - all natural resources used to produce goods and services
, labour - The factor of production comprising people in the process of production
capital - any human-made resource that is used to produce other goods and services
enterprise - skills & risk taking ability of business owners
opportunity cost - the most desirable alternative given up as the result of a decision
Planned economy - An economy where decisions on resource allocation are guided by the
state
Mixed economy - a market-based economic system in which the government is involved to some
extent
Market economy - an economy in which the resources are owned and controlled by the people of the
country.
demand - Consumer willingness and ability to buy products
quantity demanded - the actual amount of a good or service consumers are willing to buy at some
specific price
extension of demand - The increase in quantity demanded due to a fall in price
contraction of demand - The fall in the quantity demanded due to a rise in price
substitute good - a product that satisfies the same basic want as another product
complementary good - a product often used with another product
subsidy - A government payment that supports a business or market
indirect tax - a tax levied on goods or services rather than on persons or organizations
cost of production - What a firm must pay for its inputs
GLO01), 2025/2026 – Complete Study Notes
the basic economic problem - Needs and wants are unlimited, but resources are scarce
scarcity - when there is not enough of something
resources - something that can be used to fulfill a need
economic goods - Goods that are scarce and therefore have an opportunity cost.
free goods - Goods that are not scarce, and are therefore available without limit.
public sector - the part of the economy that involves the transactions of the government
private sector - the part of the economy that involves the transactions of individuals and
businesses
economic agents - Firms, households, governments
the basic economic questions - 1. What to produce
2. How to produce
3. For whom to produce
a good - A physical product
a service - is an output that provides benefits without the production of a tangible product.
factors of production - Land, Labor, Capital, Enterprise
land - all natural resources used to produce goods and services
, labour - The factor of production comprising people in the process of production
capital - any human-made resource that is used to produce other goods and services
enterprise - skills & risk taking ability of business owners
opportunity cost - the most desirable alternative given up as the result of a decision
Planned economy - An economy where decisions on resource allocation are guided by the
state
Mixed economy - a market-based economic system in which the government is involved to some
extent
Market economy - an economy in which the resources are owned and controlled by the people of the
country.
demand - Consumer willingness and ability to buy products
quantity demanded - the actual amount of a good or service consumers are willing to buy at some
specific price
extension of demand - The increase in quantity demanded due to a fall in price
contraction of demand - The fall in the quantity demanded due to a rise in price
substitute good - a product that satisfies the same basic want as another product
complementary good - a product often used with another product
subsidy - A government payment that supports a business or market
indirect tax - a tax levied on goods or services rather than on persons or organizations
cost of production - What a firm must pay for its inputs
