Goods, Services & Applied Economics Vocabulary

Vocabulary flashcards covering key terms from the lecture on goods, services, applied economics, and basic economic problems.

Good

A tangible item you can see, feel, and use.

Tangible Good

Another name for a physical good that can be touched and owned.

Economic Good

A useful good that is scarce relative to demand and therefore carries a price.

Free Good

A good abundant enough to satisfy all needs without payment (e.g., air).

Essential Good

A good that meets basic human needs such as food and medicine.

Luxury Good

A non-essential item that provides comfort; demand rises more than proportionally with income (e.g., jewelry, yachts).

Consumer Good

A final good purchased for personal consumption (e.g., toothpaste).

Capital (Industrial) Good

A good used to produce other goods or services, like machinery or buildings.

Capital-Intensive Technique

Production method that relies mainly on machinery and equipment.

Labor-Intensive Technique

Production method that relies mainly on human labor.

Service

An action performed for someone else; an intangible good.

Intangible Good

Alternate term for a service—cannot be physically touched.

Applied Economics

Application of economic theory to real-world situations to predict outcomes and guide action.

Econometrics

Use of statistical and mathematical tools to test economic hypotheses and forecast trends.

Scarcity

The tension between unlimited wants and limited resources.

Central Economic Problem

The necessity of making choices because resources are scarce.

What to Produce?

Economic question about which goods and services should be created to meet consumer needs.

How to Produce?

Economic question about selecting production techniques and resource combinations.

For Whom to Produce?

Economic question about how output will be distributed among members of society.

Microeconomics

Branch of economics focusing on resource allocation and income distribution at the individual or firm level via the price system.