Chapter 3 Flashcards
Inflation
An increase in the general level of prices for goods and services
Cost-push inflation
Rising prices as a result in rising productions costs
Hyperinflation
Rapidly rising prices that are out of control
Time-Value of money
A concept that says a dollar you received in the future will be worth less than a dollar you received today
productivity
A measure of the efficiency with which goods and services are made (comparison of total output to total input)
Consumer Price Index
Tools used to measure inflation in the US
Demand-Pull inflation
Higher prices as a result of consumers wanting to buy more good and services than producers supply
Real-Cost inflation
Rising prices due to scarce resources or increased difficulty in obtaining resources
Disinflation
Rising prices with the rate of increase slowing down
Economizing
Saving as much as possible and spending money only when necessary
Product Differentiation
Sellers who have a similar product to others may try to market their product as different from or better than the other products.
Emotional Buying
The process of purchasing products based on desire rather than logic
Impulse Buying
Purchasing something on the spur of the moment without thinking
Market-Based Pricing
Prices set to be competitive with prices of similar products
Banner Ads
Internet ads that span the top, bottom, or sides of a web page
Customer Loyalty Program
Designed to encourage a customer’s repeat business
Ponzi Scheme
A fraudulent investment operations in which money collected from a new investors is used to pay off earlier investments
Pyramid Schemes
A multileveled marketing gimmick that promises commissions on one own sales as well as on the sales of recruits
Liquidation
The business wants to sell everything right away, but not necessarily at reduce prices
FDA (Food & Drug Administration)
Approves drugs before they can be sold, takes years of research, testing and proof of effectiveness and safety
HIPPA (Health Insurance Portability and Accountability Act)
Projects your health and billing information, including info stored on computer networks
Low-Balling
Advertising a basic service at an unusually low price and then claiming additional repairs or services are need ( OIL CHANGES)
Warranty
Statement guarenteing the quality and performance of a product or service
What Happens to your purchasing power when inflation Increases
It would decrease
Dost a Cost-of-living raise give consumers more purchasing power
NO
When it comes to consumers, list the 4 things that are effected by inflation
Employment, Spending, Saving and Investing
A inflation rises, the true buying power of each dollar ______; this means an individual’s standard of living will _______
Lower, Drop/decrease
What happens to the value of money as a general price level rise?
Value of money would fall
In a market economy, if a price is set too low, what will consumers think about the procut
Low Value
Low Quality
What is the difference between Generic and Brand Name drugs
Similar drugs but generic is cheaper
When consumer engage in optimizing, they have to be careful that it doesn’t lead to what?
OVERSPENDING
Are consumers allowed to copy the contents of a CD/DVD to a portable device for their own personal purposes?
Yes
