Chapter 3

Question 1

Inflation

Answer 1

An increase in the general level of prices for goods and services

Question 2

Cost-push inflation

Answer 2

Rising prices as a result in rising productions costs

Question 3

Hyperinflation

Answer 3

Rapidly rising prices that are out of control

Question 4

Time-Value of money

Answer 4

A concept that says a dollar you received in the future will be worth less than a dollar you received today

Question 5

productivity

Answer 5

A measure of the efficiency with which goods and services are made (comparison of total output to total input)

Question 6

Consumer Price Index

Answer 6

Tools used to measure inflation in the US

Question 7

Demand-Pull inflation

Answer 7

Higher prices as a result of consumers wanting to buy more good and services than producers supply

Question 8

Real-Cost inflation

Answer 8

Rising prices due to scarce resources or increased difficulty in obtaining resources

Question 9

Disinflation

Answer 9

Rising prices with the rate of increase slowing down

Question 10

Economizing

Answer 10

Saving as much as possible and spending money only when necessary

Question 11

Product Differentiation

Answer 11

Sellers who have a similar product to others may try to market their product as different from or better than the other products.

Question 12

Emotional Buying

Answer 12

The process of purchasing products based on desire rather than logic

Question 13

Impulse Buying

Answer 13

Purchasing something on the spur of the moment without thinking

Question 14

Market-Based Pricing

Answer 14

Prices set to be competitive with prices of similar products

Question 15

Banner Ads

Answer 15

Internet ads that span the top, bottom, or sides of a web page

Question 16

Customer Loyalty Program

Answer 16

Designed to encourage a customer’s repeat business

Question 17

Ponzi Scheme

Answer 17

A fraudulent investment operations in which money collected from a new investors is used to pay off earlier investments

Question 18

Pyramid Schemes

Answer 18

A multileveled marketing gimmick that promises commissions on one own sales as well as on the sales of recruits

Question 19

Liquidation

Answer 19

The business wants to sell everything right away, but not necessarily at reduce prices

Question 20

FDA (Food & Drug Administration)

Answer 20

Approves drugs before they can be sold, takes years of research, testing and proof of effectiveness and safety

Question 21

HIPPA (Health Insurance Portability and Accountability Act)

Answer 21

Projects your health and billing information, including info stored on computer networks

Question 22

Low-Balling

Answer 22

Advertising a basic service at an unusually low price and then claiming additional repairs or services are need ( OIL CHANGES)

Question 23

Warranty

Answer 23

Statement guarenteing the quality and performance of a product or service

Question 24

What Happens to your purchasing power when inflation Increases

Answer 24

It would decrease

Question 25

Dost a Cost-of-living raise give consumers more purchasing power

Answer 25

NO

Question 26

When it comes to consumers, list the 4 things that are effected by inflation

Answer 26

Employment, Spending, Saving and Investing

Question 27

A inflation rises, the true buying power of each dollar ______; this means an individual’s standard of living will _______

Answer 27

Lower, Drop/decrease

Question 28

What happens to the value of money as a general price level rise?

Answer 28

Value of money would fall

Question 29

In a market economy, if a price is set too low, what will consumers think about the procut

Answer 29

Low Value
Low Quality

Question 30

What is the difference between Generic and Brand Name drugs

Answer 30

Similar drugs but generic is cheaper

Question 31

When consumer engage in optimizing, they have to be careful that it doesn’t lead to what?

Answer 31

OVERSPENDING

Question 32

Are consumers allowed to copy the contents of a CD/DVD to a portable device for their own personal purposes?

Answer 32

Yes