Unit 3

January 27, 2018 Off By admin
Term Definition
Economy The system of production and distribution and consumption. The overall measure of a currency system.
Free market Any market in which trade is unregulated; an economic system free from government intervention. Allows supply and demand to regulate prices, wages, etc, rather than government.
Competition The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and
Profit The excess of total revenues over total costs in a given time period.
Price Competition The rivalry among firms seeking to attract customers on the basis of price, rather than by the use of other marketing factors.
Factors of Production The productive resources of an economy, usually classified as land, labor, and capital. Entrepreneurship is frequently included as a fourth factor of production.
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. It is also called ownership utility.
Time Utility The increased satisfaction created by marketing through making products available at the time consumers want them.
Market Economy An economic system in which decisions concerning production and consumption are made by individuals and organizations without intervention by a central planning authority.
Mixed Economy a system in which both the state and private sector direct the way goods and services are bought and sold.
Communism a political philosophy or ideology advocating holding the production of resources collectively.
Socialism Any of various economic and political philosophies that support social equality, collective decision-making, and distribution of income based on contribution and public ownership of productive capital and natural resources, as advocated by socialists.
Capitalism a socio-economic system based on the abstraction of resources into the form of privately- owned money, wealth, and goods, with economic decisions made largely through the operation of a
market unregulated by the state.
Productivity A measure of the economic output per unit of input of some resource, e.g., the economic output per hour of human labor.
Gross Domestic Product An estimate of the total national output of goods and services produced in a single country in a given time period and valued at market price.
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) A statistical measure maintained by the U.S. government that shows the trend of prices of goods and services (a market basket) purchased by consumers.
Producer Price Index (PPI) A monthly price index of about 2,800 commodities prepared by the U.S. Bureau of Labor Statistics, formerly known as the wholesale price index.
Inflation An economic condition characterized by a continuous upward movement of the general price level.
Standard of Living relative measure of the general well-being of a person or group.
Unemployment Rate the percent of the total labor force without a job.
Supply A schedule of the amounts of a good that would be offered for sale at all possible prices at any one instance of time.
Demand A schedule of the amounts that buyers would be willing to purchase at a corresponding schedule of prices, in a given market at a given time.
Elastic A situation in which a cut in price increases the quantity taken in the market enough that total revenue is increased.
Inelastic A situation in which a cut in price yields such a small increase in quantity taken by the market that total revenue decreases.
Equilibrium A situation in which the quantity and price offered by sellers equals the quantity and price taken by buyers.