Marketing Economy 8B: Economy Unit

Question Answer
Economy The system of production and distribution and consumption
Free market (market economy) an economic system free from government intervention. Allows supply and demand to regulate prices, wages, etc, rather than government
Profit The excess of total revenues over total costs
Price Competition The rivalry among firms seeking to attract customers on the basis of price
Factors of Production The productive resources of an economy, usually classified as land, labor, and capital
Utility The usefulness received by consumers from buying, owning, or consuming a product.
Place Utility The increased usefulness created by marketing through making a product available at the place consumers want
Possession Utility The increased usefulness created by marketing through making it possible for a consumer to own, use, and consume a product
Time Utility The increased satisfaction created by marketing through making products available at the time consumers want them
Mixed Economy both the state and private sector direct the way goods and services are bought and sold
Gross National Product (GNP) The money value of a nation's entire output of final commodities and services in a given period
Consumer Price Index (CPI) shows the trend of prices of goods and services purchased by consumers
Inflation An increase in prices in a country that results in a decline in the purchasing power of consumers
Supply amounts of a good that would be offered for sale at all possible prices at any one instance of time
Demand amounts that buyers would be willing to purchase at a corresponding schedule of prices, in a given market at a given time
resources all the things used in producing goods and services
infrastructure the physical development of a country
entrepreneurship the skills of people who are willing to invest their time and money to run a business
scarcity the difference between wants and needs and available resources
traditional economy habits, traditions and rituals answer the basic questions of what, how, and for whom
command economy a system in which a country's government makes all economic decisions regarding what, how, and for whom goods and services will be produced and distributed

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