Glossary

All physical equipment (machinery, buildings, infrastructure) used by people in a process of production, for example, a secretary uses a computer; a bricklayer uses a trowel; a farmer uses a plough. In modern economies, intellectual property and knowledge are types of human capital – necessary resources in the production of goods and services.

An economic model that provides a theoretical and simplified representation of operations of an economy, depicting interactions between various sectors of the economy (household, business, finance, government and foreign sectors), and flows of resources and income between them.

An ability of a countries/economies to gain from trade with each other, regardless of their factor endowments. Given a choice of producing two products, a country is said to have a comparative advantage when it specialises in the production and export of particular goods and services that it can produce more efficiently; that is, at a lower opportunity cost than competitors.

An advantage that a business holds over others in its industry, sector or location. The advantage means that the business is able to sell more of a product, or operate at a lower cost, or better meet the needs of consumers. Competitive advantage usually implies that a business is more profitable than its competitors.

A person or a group that is the final user of goods and services produced within an economy.

When businesses consider the interests of stakeholders, society and the environment when making economic and business decisions.

Determination and evaluation of benefits and costs of a project or decision. The evaluation includes monetary and non-monetary effects.