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Marketing Principles Chapter 5 Vocabulary

Terms in this set (25)

Economics
is a science that examines how goods and services are produced and sold and used
Macroeconomics
is the branch of economics that studies human behavior and choices that relate to entire economy of the nation
microeconomics
is the branch of economics that studies human behavior and choices that relate to the economic decisions of individuals and businesses
factors of production
are the economic resources a nation uses to make goods and supply services for its population
labor
is the work performed by people in businesses
Productivity
is the amount of work a person can do in a specific amount of time usually an hour
capital
is all the tools and machinery used to produce goods or provide services
capital goods
are those products businesses use to produce other goods
infrastructure
consists of the transportation systems and utilities necessary in a modern economy
technology
is the use of science to invent useful things or to solve problems
Entrepreneurship
the willingness and ability to take the risks involved in starting and managing a business
Scarcity
develops when demand is higher than the available resources
trade off
is when something is given up in order to gain something else
opportunity cost
is the value of the next best option that was not selected
systematic decision making
a process of choosing an option after evaluating the available information and weighing the costs and benefits of the alternatives
economic system
is an organized way in which a nation chooses to use its limited resources to create goods and services that answer the three economic questions
economic input
includes the resources used to make products
economic output
Is all the goods and services produced by an economic system during a specific time.
Traditional Economy
is one in which economic decisions are based primarily on a society's values , culture and customs
command economy
Government makes all economic decisions for citizens
market economy
is one in which individuals and businesses are free to make their own economic decisions with limited government involvement
mixed economy
both government and individuals make decisions about economic resources
law of supply and demand
says that the price of a product is determined by the relationship of the supply of a product and the demand for the product
Equilibrium
is a point at which the supply equals the demand for a product
market forces
are economic factors that affect the price, demand, and availability of a good or service
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