|Economy||– The system of production and distribution and consumption. The overall measure of a
|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
|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 (GDP)||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
|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.