Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Marketing > ECON fuck > Flashcards

ECON fuck Flashcards

1
Q

Please give a definition of costs?

A
  • Amount sacrificed to achieve a particular business objective
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are opportunity costs?

A
  • the value in monetary terms of being deprived of the next best opportunity in order to pursue the particular objective
  • Opportunity cost simply refers to the concept that if a person or company does X, the person or company necessarily cannot also do Y. There are only finite resources available in most cases (time, money, etc)

e.g: it is unwise for a company to invest $ 1 million in a project, earning $ 3 million if that same investment prevents it from investing the $ 1 million in another opportunity that would earn $ 10 million
thus opportunity cost can be defined as the loss of incremental profit of $ 7 million (10 -3 $ million)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the cost function? What does it include?

A
  • The total cost function is the relationship between output and the lowest possible cost of producing a given output
  • Total cost = Fixed cost + Variable cost
  • Average cost = total cost / quantity
  • Marginal cost = rate of change in total cost with respect to output
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the total costs?

A

Total Cost = Fixed Cost + Variable cost

  • If the firms is producing efficiently, the total cost will increase with output
  • Costs can be classified into fixed and variable costs
  • Some costs may be semi-fixed and they are constant over a range of output
  • When a firm increases its cost, fixed cost will not remain constant
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What´s the break even point and what does it tell you?

A
  • How much should the revenue be to pay for the costs
  • Break-even point = no profit & no loss
  • When costs are too high
  • When the company is economically sustainable
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the weaknesses of BE analysis?

A
  • there are non-linear relationships between costs, revenues and volume
  • there may be stepped fixed costs. Most fixed costs are not fixed over all volume of activity
  • multi-product business have problems in allocating fixed costs to particular activities
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the average costs?

A
  • Can vary with output. If it does not it has constant returns to scale
  • when AC decreases (increases) with output there are economies (diseconomies) of scale
  • A given process may have economies of scale over one range of output and diseconomies in another
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How are the average costs related to the units of output?

A
  • The average cost function AC (Q) shows the firm’s average, or per-unit cost for any level of output (Q)
  • Average costs are not necessarily the same at each level of output
  • Average costs decline initially as fixed costs are spread over additional units of output
  • Average costs eventually rise as production runs up against capacity constraint
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

On what does the quantity of a product a firms is able to sell depend upon?

A
  • The price of the product
  • The prices of related products
  • Income and taste of the consumers and so on
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What´s the demand curve?

A
  • When all other variables are held constant the price the firm changes and the quantity the firm cans sell is inversely related

The demand curve reports:

  • The quantity bought of various prices and
  • The highest price the market will bear for a given output
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

When don´t we have a downward sloping demand curve?

A

Downward sloping demand curve exist for most product

The exceptions are when:

  • Price signals quality
  • Price implies prestige
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What´t the swot analysis?

A
  • Strengths and weaknesses are often internal to your organization
  • Opportunities and threats generally relate to external factors
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Swot analysis: What does strength refer to?

A
  • what advantages does you organization have
  • what do you do better than anyone else?
  • what do people in your market see as your strengths
  • what product attributes “get you the sale”?

e.g: our lead consultant has strong reputation in the market or we have low costs, so we can offer good value to customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Swot analysis: What does weakness refer to?

A
  • what could you improve?
  • what should you avoid?
  • what are people in your market likely to see as weakness?
  • what factors loose you sales?

e.g: our company has little market presence or reputation or we have a small staff, with a shallow skill base in many areas

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Swot analysis: What do opprtunities refer to?

A
  • what good opportunities can you spot?
  • what interesting trends are you aware of?
  • changes in government policy
  • changes in social patterns, population profiles, lifestyle changes and so on

e.g: local government wants to encourage local business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Swot analysis: What do threats refer to?

A
  • what obstacles do you face?
  • what are your competitors doing
  • is changing technology threating your position?
  • do you have bad debt or cash flow problems?

e.g: developments in technology may change the market beyond our ability to adapt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What´s benchmarking and how does it help companies?

A

Process of measuring products, services and practices against those of the toughest competitions or renowned leaders

Helps companies in:

  • Boosting product quality
  • Developing more user-friendly products
  • Improving customer order processing activities
  • Shortening delivery load times
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What´s the purpose of a performance measurement?

A

It´s to improve:

  1. Financial management: efficient and effective use of finance
  2. Business organisation: profit, ROI
  3. Motivation and control of the organisation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What are possible tools for financial management?

A
  1. Cash flow planning: availability of cash when needed
  2. Profitability: need to acquire resources at a greater rate than using them
  3. Assets and finance: balance sheet
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What the cash flow?

A
  1. Cash is vital to long term trading
  2. Cash inflow from e.g: sales
  3. Cash outflow from e.g: costs of goods or labour
  4. More money spent than received = negative cash flow
  5. Cash is a ‘liquid asset’
  6. Available for investment
  7. Avoids having to seek credit or loans
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What´s the The cash flow cycle?

A
  • balances cash inflow against cash outflow

lack of cash can:

  1. lead to business failure
  2. affect the business reputation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

How can a businesses improve it´s cash flow?

A
  1. pay as little interest as possible
  2. pay debts on time; consolidate at low interest
  3. negotiate payment terms with suppliers
  4. avoid offering discounts
  5. make better use of assets
  6. e.g. hire out warehouse space
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What are operations management perspectives?

A
  1. Quality
  2. Flexibility
  3. Speed and dependability
  4. Cost
  5. Quantity
24
Q

What the Price elasticity of demand?

A
  • Elasticity is the sensitivity of the demand to changes in price
  • Elasticity is the percentage change in quantity brought about by a percent change in price

Check formula

25
Q

When can the demand be described as elastic?

A
  1. the product is undifferentiated
  2. expenditure on the product is a smaller fraction of the total expenditure
  3. the product is an input in the production of a final good
  4. there are readily available substitutes
26
Q

When can the demand be described as unelastic?

A
  1. complexity of the product makes comparison difficult
  2. information about substitutes is scarce
  3. cost is not fully borne in market price
  4. switching to other products is costly
  5. product is used jointly with other products to which the customer is committed
27
Q

Please explain the concept of game theory?

A
  1. in game theory, a game is a formal model of an interactive situation
  2. a model of optimally taking into consideration not only benefits less costs, but also the interaction between participants
  3. game theory attempts to look at the relationships between participants in a particular model and predict their optimal decisions
  4. when there are few firms in the industry, firms will have to consider the reaction of the rivals
  5. game theory is useful in these “small number” contexts
  6. in game theoretic models each player anticipates the actions and reactions of its competitors
28
Q

How do pricing decisions influences the Demand and what are cosiderations before changing price?

A
  • primarily concern the nature of the target market and expect reaction of consumers to a given price or change in price

primary considerations

  1. demographic factors
  2. physiological factors
  3. price elasticity
29
Q

What are possible Demographic factors in the context of Pricing strategy?

A
  1. no. of potential buyers
  2. location of potential buyers
  3. position of potential buyers
  4. expected consumption rates of potential buyers
  5. economic strength of potential buyers
30
Q

What are possible Types of psychological pricing strategies?

A
  1. prestige pricing: involves charging a high price to create a signal that the product is exceptionally fine
  2. odd pricing: prices are set at one or a few cents or dollars below a round number in order to create the perception that the price is low
  3. bundle pricing: involves selling several products together at a single price in order to suggest a good value
31
Q

What are the pricing objectives?

A
  • pricing objectives should be derived from overall marketing objectives which in turn should be derived from corporate objectives

Include

  1. achieving a target return on investment
  2. stabilization of price and margin
  3. achieving a target market share
  4. meeting or preventing competition
32
Q

What are possible in pricing strategys and how they relate to the costs?

A
  • price of a product must cover costs of production, promotion and distribution
  1. markup pricing: involves adding a percentage to the invoice price in order to determine the final selling price (retailing)
  2. cost-plus pricing: totalling of the costs of producing a product or completing a project and then adding on a percentage or fixed profit amount (manufacturing)
  3. rate-of-return pricing: involves adding a desired rate of return on investment to total costs (manufacturing)
33
Q

What are advantages and disadvantages of the Break-even analysis when it comes to pricing decicions?

A

Advantages

  1. simplicity
  2. yields a good pricing decision

Disadvantages

  1. little or no consideration to demand factors
  2. fails to reflect competition adequately
34
Q

What are Product considerations in the context of pricing decisions?

A

Life cycle

  1. skimming policy: seller charges a relatively high price on a new product initially and then lowers the price at a later date to make sales to met price – sensitive buyers
  2. penetration policy: seller charges a relatively low price on a new product initially in order to grow a market, gain market share, and discourage competitors from entering the market
35
Q

How does the internet and a changed business enviroment affect pricing decisions?

A

Internet

  • has made prices much easier for consumers and organizational buyers to compare
  • has forced marketers to be much more transparent in their pricing strategies
36
Q

When does the gouvernment regulate the pricing decisions?

A
  1. price fixing: competitors in a market collude to set the final price of a product
  2. deceptive pricing: involves price deals that mislead the consumer
  3. price discrimination: charges different prices to different buyer for goods of like grade and quality
  4. predatory pricing: involves charging a very low price for a product with the intent of driving competitors out of business
37
Q

What are the main points to consider when setting up a general pricing model?

A
  1. set pricing objectives
  2. evaluate product-price relationships
  3. estimate cost and other price limitations
  4. analyse profit potential
  5. set initial price structure
  6. change price as needed
38
Q

What do marketers need to consider when evaluating a product price and how can the product then be priced?

A

marketers need to consider:

  1. what value the product has for customers
  2. how price will influence product positioning

product could be priced

  1. relatively high for a product class: if it offers value in the form of high quality, special features, or prestige
  2. average for the product class: if it offers value in the form of good quality for a reasonable price
  3. relatively low for a product class: if it offers value in the form of acceptable quality at a low price
  • value pricing: setting prices so that targeted customers will perceive products to offer greater value than competitive offering
39
Q

How can costs and other price limitations be estimated?

A

Costs

  • to produce and market products provide a lower bound or pricing decision and a baseline from which to compute profit potential

Other price limitations

  • government regulations
  • prices charged by competitors for similar and substitute products
40
Q

How can the sales be increased?

A
  1. Quantity discounts: discounts for purchasing a large number of units
  2. Promotional allowances: price reduction offered to channel members in exchange for performing various promotional activities
  3. Slotting allowances: payments to retailers to get them to stock items on their shelves, a common tactic for getting new products into stores “listing fees”
41
Q

What does the Balance sheet tell us?

A
  1. summarizes the financial condition of the business at a point in time
  2. estimates net worth of owner equity:
    = assets – liabilities
  3. most transactions affect the balance sheet, so it may change daily
  4. everything “owned” and “owed” by a business or individual at a given point in time
    Asset: anything of value owned
    Liability: any debt or other financial obligation owed to someone else
42
Q

What´s an asset?

A
  1. an asset can be sold to generate cash
  2. used to produce other goods to be sold and create cash
  3. difference between liquid (grain, apples) and non-liquid assets (machinery, land, etc.)
  4. non-liquid because their selling would affect liquid assets creation
43
Q

What are current and non current assets?

A

Current assets

  1. goods that have already been produced and can be sold quickly without disrupting future production activities
  2. goods that will be used up or sold within the next year

Non-current assets

  1. any asset that is not a current asset
  2. assets that are owned primarily to produce output, that will be sold to produce revenue
  3. selling non-current assets to generate revenue would affect the firm’s ability to produce future income
  4. more difficult to cell quickly and easily at their full market value
44
Q

What are Liabilities?

A
  1. an obligation or debt owed to someone else
  2. an outsider’s gain against one or more assets of the business
45
Q

What are Current liabilities and non Current liabilities?

A

Current liabilities

  • financial obligation that will become due and payable within 1 year (require cash available within the next year)

Non-current liabilities

  • all obligations that do not have to be paid in full within the next year
46
Q

What the owner equity?

A
  1. the amount of money left for the owner if the assets were sold and all liabilities paid
  2. called Net Worth
  3. OE (Owner equity) is the owner’s current investment are equity in the business
  4. owner equity = total assets – total liabilities
47
Q

What´s the Balance sheet anlysis?

A
  1. used to measure the financial condition of the business (management tool):
  • compare to other, but similar business
  • compare to the same business over time
  1. lenders use balance sheet analysis to make lending decisions and to monitor, the fincancial progress of their customers
  2. to deal with relative size issue, use what?
48
Q

Please explain the concept of liquidity and how we can meassure it?

A
  1. ability of the business to generate cash
  2. short-term measure
  3. measure the ability to meet financial obligations
  • as they come due
  • without disturbing normal revenue generating activities

Current ratio: current assets ÷ current liabilities

49
Q

Please explain the concept of slovency?

A
  1. measure the degree to which liabilities are backed up by assets
  2. measures liabilities relative to owner equity
  3. analyses the business debt, that is the ability to pay off all liabilities if all assets were sold
  4. relations among asset, liabilities, equity
50
Q

What´s an income statement?

A
  1. a summary of revenue and expenses for a given accounting period otherwise called
  2. purpose is to measure the difference between revenue and expenses
  • a positive difference indicates a profit
  • a negative difference indicates a loss
51
Q

What´s the reveue?

A
  1. includes all business revenue earned during the accounting period, before any costs or expenses are deducted
  2. called “top line” or “gross income”
  3. also called sales or turnover (UK)
52
Q

What are expenses?

A
  1. expenses ocurre in producing the revenue

cash expenses
purchase of and payment for feed, fertilizers, seed, market livestock, fuel
non-cash expenses

  • decrease in value of assets used to produce the revenue
  • accounts payable, accrued interest, other accrued example: for e.g. property taxes
53
Q

How is the income used?

A

Net farm income must end up in one of favour uses

  1. owner withdrawals for family living expenses
  2. payment of income and social security taxes
  3. increase in cash or other from assets
  4. reduction in liabilities through principal payments on loans or payment of other liabilities
54
Q

What´s Profitability?

A
  1. measures efficiency in using resources to produce profit
  2. “profitability” is a relative measure and several factors influence whether acceptable or not:
  • what you are trying to accomplish (goals ??)
  • size of the business
  • what is acceptable to other: investors, family members, other owners, etc.
55
Q

How can profitability be analyzed?

A
  1. Net farm Income
  2. Rate of return-on farm assets (ROA, RO
  3. Rate of return-on farm equity (ROE)
  4. Operating profit margin ratio

Marketing (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions