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| Question | Answer |
| Capital | The physical plant, machinery and equipment used to produce other goods. Capital goods are human-made goods that do not directly satisfy human wants. |
| Economic growth | The ability of an economy to produce greater levels of output, represented by an outward shift of its production possibilities frontier. |
| Economic system | A system of production and exchange of goods and services as well as allocation of resources in a society. |
| Incentive | Is something that motivates an individual to perform an action. |
| Land | A shorthand expression for any resource provided by nature. |
| Microeconomics | The branch of economics that studies decision-making by a single individual, household, firm or industry. |
| Opportunity Cost | The best alternative sacrificed for a chosen alternative. |
| Relative scarcity | The condition in which human wants are forever greater than the available supply of time, goods, services and resources. |
| Technology | The body of knowledge applied to how goods and services are produced. |
| Ceteris paribus | A Latin phrase that means that while certain variables change, ‘all other things remain unchanged’ |
| Economic model | Numerical table graph or mathematical equation used to describe what is expected to happen in reality. Economics is a social science, involving human beings and their behaviors, so the models can never be perfect. Rather, they are a close approximation of what is reasonable to expect to happen. |
| Economics | The study of how society chooses to allocate its scarce resources to the production of goods and services in order to satisfy unlimited wants. |
| Investment | The process of producing capital, such as factories, machines and inventories. |
| Macroeconomics | The branch of economics that studies decision-making for the economy as a whole. |
| Mixed economy | Is an economic system that is variously defined as containing a mixture of markets and economic planning. A mixture of free market with government intervention. |
| Positive Economics | An analysis limited to statements that are verifiable. |
| Resources/factors of production | The basic categories of inputs used to produce goods and services. Resources are also called factors of production. Economists divide resources into three categories: land, labor and capital. |
| Command economy | Also known as Planned. Refers to an economic system whereby decisions regarding production and investment are made by a central authority. (for example, Government) |
| Economic problem | Relates to scarce resources and the three main economic question: 1. What to produce, 2. How to produce and 3. For whom to produce. |
| Entrepreneurship | The creative ability of individuals to seek profits by combining resources to produce new or existing products. |
| Labour | The mental and physical capacity of workers to produce goods and services. |
| Market | A place where forces of demand and supply operate, and where buyers and sellers interact. |
| Normative economics | An analysis based on value judgement. |
| Production possibilities frontier(PPF) | Is an economic model. The curve shows all the possible maximum combinations of two products that can be produced in an economy, given its available resources and technology. |
| Self-interest | This involves members of the community respecting the laws while they pursue their own individual goals. |
| Enterprise | Entrepreneurship is a special type of labor-the creative ability of individuals to seek profits by combining resources to produce. |
| The economic way of thinking | using economic models to help understand and predict the impact of changes in economic variables. |
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