The first key concept a student attempting to respond to this series of questions should address is the concept of "happiness." The Greek term used by Aristotle is "eudaimonia," which would, perhaps, better be translated as "well-being." Unlike "hedone" or pleasure, which is a transitory sensation, eudaimonia means something closer to well-being or having a good life. Thus for Aristotle, a life devoted to sensual pleasure would not be an example of eudaimonia.

Aristotle defines the good as something people must seek as an end in itself rather than as a means to an end. In other words, while people seek money, they rarely do so to obtain money itself but rather seek money because it can enable them to obtain other goods such as material objects, security, and prestige. Thus it might be a step toward a good life but not the good life itself. The good or complete life, therefore, is one in which a person attains an ultimate rather than proximate good, or something that is good in itself rather than simply a means to other good things.

The term translated as "virtue" is "arete" which means something on the order of "excellence." While in earlier Greek texts, it could refer to specific skills such as martial prowess (the root of the term is "Ares," the Greek god of war) or skill in making shoes or riding horses, Aristotle's teacher, Plato, argued that there was one unifying virtue or "arete" of which specific skills were reflections.

This overarching virtue was that of a human qua human being. Since what is distinctive about humans is reason, for Aristotle reason was a central component of virtue and the contemplative life, which involved the greatest exercise of reason: the most perfect life.