Key Economic Concepts and Definitions

A complete set of vocabulary flashcards covering foundational economic terms, laws, market types, factors of production, and methodological concepts.

Opportunity Cost

The value of the best alternative forgone when making a choice.

Production

The creation of goods and services using resources.

Property as an Economic Category

Relations concerning the appropriation, use, and alienation of goods.

Monetary Aggregates

Indicators of the volume and structure of the money supply.

Deductive Method

The transition from general theories to the explanation of specific phenomena.

The State as an Economic Agent

Public authorities that regulate the economy, provide public goods, and redistribute income.

Household

An individual or group of individuals who manage a common budget and consume goods and services.

Economy

A system of production, distribution, exchange, and consumption of goods.

Economic Category

A scientific concept reflecting the properties and connections of economic phenomena.

Economic Model

A simplified representation of an economic phenomenon for its analysis and forecasting.

Economic Science

Knowledge about the economy and the use of scarce resources to satisfy needs.

Economic Freedom

The ability to make economic decisions independently within the framework of the law.

Economic System

The totality of agents, resources, property relations, and methods of organizing the economy.

Economic Good

A good or service that satisfies a need and requires scarce resources.

Economic Choice

Choosing the best way to utilize scarce resources.

Economic Law

A stable, recurring relationship between economic phenomena.

Economic Agent

A participant in economic activity who makes decisions and conducts economic operations.

Economic Costs of Production

Explicit monetary expenses and the implicit value of one's own resources.

Economic Interests

Goals and motives of behavior that arise on the basis of economic needs.

Economic Needs

The feeling of a lack of goods necessary for an individual and society.

Economic Resources

Means and capabilities for the production of goods and services.

Empirical Methods

Research based on facts, observations, statistics, and experiments.

Efficiency of the National Economy

Achieving the best possible results with scarce resources.

Law of Demand

As the price increases, the quantity demanded decreases, and as the price decreases, it increases.

Law of Supply

As the price increases, the quantity supplied increases, and as the price decreases, it decreases.

Change in Quantity Demanded

A change in the amount of a good purchased due to a change in its price; represented as a movement along the demand curve.

Change in Quantity Supplied

A change in the amount of a good offered due to a change in its price; represented as a movement along the supply curve.

Change in Demand

A change in demand driven by non-price factors; represented as a shift of the entire demand curve.

Change in Supply

A change in supply driven by non-price factors; represented as a shift of the entire supply curve.

Mixed Economic System

A combination of market mechanisms and state regulation.

Rest of the World

Non-residents conducting economic transactions with residents of the country.

Inductive Method

The transition from specific facts to general conclusions and theories.

Capital

Human-made means of production, including machinery, equipment, and buildings.

Capital Goods

Means used for the production of other goods and services.

Competition

Economic rivalry among market participants for benefits and superior operating conditions.

Production Possibility Curve

A model showing all maximum possible combinations of producing two goods given available resources and technology.

Demand Curve

A graph showing the relationship between price and quantity demanded; typically downward-sloping.

Human Capital

The knowledge, abilities, skills, experience, and health of an individual.

Macroeconomics

The study of the national economy as a whole.

Method of Scientific Abstraction

Isolating the primary, essential aspects of a phenomenon while setting aside secondary details.

Methodology of Macroeconomics

The collection of methods and principles used to investigate the national economy.

Microeconomics

The study of the behavior of individual consumers, enterprises, and markets.

Circular Flow Model

A diagram illustrating the flow of resources, goods, services, and money among economic agents.

Subsistence Production

The production of goods intended for personal consumption rather than for sale.

National Economy

The system of economic activities within a country.

Normative Macroeconomics

Determines the desirable state of the economy and sets the goals of economic policy.

Scarcity of Resources

The insufficiency of resources to satisfy all human needs.

Exchange

The stage of reproduction during which goods, services, and income move between agents.

Entrepreneurial Ability

The capacity to organize production, make critical decisions, and take risks.

Enterprise (Firm)

An economic entity that utilizes resources to produce goods and services.

Positive Macroeconomics

Studies the actual state of the economy and the objective causes of economic phenomena.

Demand

The desire and financial ability of a consumer to purchase a good at a specific price.

Demand for Money

The desire and willingness to hold a portion of one's wealth in monetary form.

Derived Demand for Economic Resources

Demand for resources that is dependent upon the demand for the goods and services they help produce.

Property Rights

Legally recognized rights to possess, use, and dispose of property.

Labor

Physical and mental activity directed toward the creation of goods and services.

Consumer Goods

Goods and services intended for the direct satisfaction of personal needs.

Natural Resources

Elements of the natural environment utilized in economic activity.

Supply

The willingness and ability of producers to sell a specific quantity of a good across different price levels.

Market Economic System

A system in which economic decisions are primarily driven by the market, private property, competition, demand, and supply.

Market Equilibrium

A condition where the quantity demanded equals the quantity supplied.

Market

A system of relationships between buyers and sellers for the exchange of goods, services, and resources.

Resource Market

A market where factors of production are bought and sold.

Market for Goods and Services

A system of relationships governing the purchase and sale of consumer goods and services.

Distribution

The stage of reproduction in which the shares of participants in the created product are determined and incomes are formed.

Consumption

The utilization of goods and services to satisfy human needs.

Social Reproduction

The continuous renewal of production, distribution, exchange, and consumption processes.

Social Division of Labor

The specialization of workers, enterprises, and entire industries in specific forms of economic activity.

Commodity (Good)

A product of labor designed for exchange or market sale that satisfies human needs.

Normal Goods

Goods for which demand rises as consumer income rises.

Luxury Goods

Goods for which demand grows at a faster rate than consumer income.

Inferior Goods

Goods for which demand declines as consumer income increases.

Substitute Goods

Goods that can replace one another; an increase in the price of one increases demand for the other.

Complementary Goods

Goods consumed together; an increase in the price of one decreases demand for the other.

Commodity Production

The production of economic goods specifically intended for exchange or sale on the market.

Financial Market

A system of relations for mobilizing, allocating, and redistributing financial resources.

Financial Sector

The set of financial institutions facilitating payments, lending, insurance, and investments.

Form of Production

The organizational framework of economic activity that dictates the purpose of goods and the mechanism of their exchange and distribution.