Economics: Key Concepts and Definitions for Students

What is a resource?

A resource is anything that can be used to produce goods and services to satisfy human wants.

What are economic resources?

Economic resources are the factors of production used to create goods and services, including land, labour, capital, and enterprise.

What is utility?

Utility is the satisfaction or benefit consumers receive from consuming goods and services.

What is production?

Production is the process of combining resources to create goods and services.

What is consumption?

Consumption refers to the use of goods and services by households to satisfy wants and needs.

What is distribution?

Distribution is the process of delivering goods and services from producers to consumers.

What are goods?

Goods are tangible products that can be seen and touched.

What are services?

Services are intangible economic activities provided by businesses or individuals.

What is specialisation?

Specialisation occurs when individuals, firms or countries focus on producing a narrow range of goods or services.

What is division of labour?

Division of labour occurs when production is divided into different tasks performed by different workers.

What is productivity?

Productivity measures the amount of output produced per unit of input.

What is efficiency?

Efficiency occurs when resources are used in the most productive way to maximise output.

What is allocative efficiency?

Allocative efficiency occurs when resources are allocated to produce the goods and services most desired by consumers.

What is productive efficiency?

Productive efficiency occurs when goods and services are produced at the lowest possible cost.

What is dynamic efficiency?

Dynamic efficiency refers to innovation and improvements in technology that increase productivity over time.

What is disposable income?

Disposable income is the income households have available to spend or save after taxes are paid.

What is consumer confidence?

Consumer confidence measures how optimistic households feel about the economy and their financial situation.

What is wealth?

Wealth refers to the total value of assets owned by individuals or households.

What is household debt?

Household debt is the amount of money households owe to financial institutions.

What is revenue?

Revenue is the total income a business receives from selling goods or services.

What are costs?

Costs are the expenses businesses incur when producing goods or services.

What is investment?

Investment is spending on capital goods to increase production capacity.

What is innovation?

Innovation refers to the development of new products, technologies or production methods.

What is competition?

Competition occurs when businesses compete to attract consumers and increase market share.

What is a monopoly?

A monopoly exists when one firm dominates an entire market with little or no competition.

What is regulation?

Regulation refers to laws and rules set by governments to control economic activity and protect consumers.

What is deregulation?

Deregulation occurs when governments reduce rules and restrictions in markets to increase competition.

What is public sector?

The public sector includes government organisations that provide goods and services funded by taxation.

What is private sector?

The private sector includes businesses owned and operated by individuals or companies seeking to make profit.

What is a public good?

A public good is a good or service that is non-rival and non-excludable.