Chapter 3 Flashcards
a concept that says a dollar you receive in the future will be worth less than a dollar you receive in the present (today)
time value of money
the value of all goods and services produced in a country in a given time period
gross domestic product (GDP)
an increase in the general level of prices for goods and services
inflation
rising prices with the rate of increase slowing down
disinflation
a decrease in the general level of prices for goods and services
deflation
higher prices as a result of consumers wanting to buy more goods and services than producers supply
demand-pull inflation
higher prices as a result of consumers wanting to buy more goods and services than producers supply
demand-pull inflation
rising prices as a result of rising production costs
cost-push inflation
high prices followed by lower prices and then high prices again
reflation
rapidly rising prices that are out of control
hyperinflation
a measure of the efficiency with which goods and services are made (comparison of total output to total input)
productivity
a profit that allows a business to survive and grow
normal profit
setting a price based on how much consumers are willing to pay
value-based pricing
setting a price to be competitive with prices of similar products currently being sold
market-based pricing
setting an introductory price high to recover the research and development (R&D) costs
cost-recovery pricing
setting a price based on production cost plus a markup
cost-plus pricing
the percentage amount added to production cost to obtain the price of an item
markup
the process of selecting goods and services based on need, want, and logical choices
rational buying
the process of purchasing products based on desire rather than logic
emotional buying
purchasing something on the spur of the moment without thinking it through or any planning
impulse buying
saving as much as possible and spending money only when necessary
economizing
getting the highest value for the money spent
optimizing
carrying well-known brand names to attract customers who are loyal to those brands
branding strategy
offering the lowest everyday price possible
discount pricing
informing consumers about products and encouraging them to buy
advertising
a specific group of people who are likely to buy a product
target audience
ads placed on modes of public transportation or in public transportation areas
transit advertising
a program designed to encourage repeat business by providing special discounts and other incentives
customer loyalty program
checking prices, brands, and quality among several sellers to make sure you are getting the best deal
comparison shopping
distribution of product information directly to consumers
direct advertising
recording video or audio for later viewing or listening
time-shifting
storing media, such as music or movies, on one device to be accessed from another place through another device
space-shifting
information on products advising consumers of risks and safety issues
warning label
false or misleading claims made about the quality, price, or purpose of a particular product
deception
an illegal sales technique in which a business advertises a product with the intent of persuading consumers to buy a more expensive product
bait and switch
a technique whereby a company advertises a product or service at a low price to lure in customers and then attempts to persuade them that they need additional products or services
low-balling
an illegal, multilevel marketing gimmick that promises members commissions from their own sales as well as from the sales of other members they recruit
pyramid scheme
a fraudulent investment operation in which money collected from new investors is used to pay off earlier investors
Ponzi scheme
a scam in which a con artist convinces people to give up their money or personal information in return for a share of a larger sum of money
pigeon drop
a lengthy paid TV advertisement that includes testimonials and product demonstrations
infomercial
