Basic Microeconomics and Consumer Behavior Review

Vocabulary flashcards covering basic economic definitions, resources, economic systems, the laws of demand and supply, consumer behavior stages, influencing factors, and supply exceptions.

Economics

The study of how individuals and societies choose to use the scarce resources that nature and previous generations provided.

Macroeconomics

The branch of economics that examines the behavior of aggregate income and employment.

Microeconomics

The branch of economics focused on individual industries.

Consumer Goods

Goods that yield direct satisfaction to the consumer.

Capital Goods

Goods used in the production of other goods and services.

Essential Goods

Goods that satisfy basic human needs.

Luxury Goods

Goods that cater to man's comfort.

Economic Resources

Inputs or factors of production that carry a price tag because they are scarce.

Free Resources

Resources that do not have a price tag because they are abundant.

Land (Resource)

Natural resources, not man-made, found under land.

Labor (Resource)

Labor power used in the production process.

Capital (Resource)

Anything that is used to produce a good.

Entrepreneurship

The economic resource that organizes and coordinates land, labor, and capital.

Traditional Economic System

An economic system based on culture and tradition in its decisions.

Command Economy

An economic system in which answers to economic problems are directed by the government.

Market System

An economic system that deals with economic problems by considering consumer choices.

Law of Demand

A fundamental principle stating that the quantity demanded of a good shows an inverse relationship with its price when other factors are held constant (ceteris paribus).

Giffen Good

A type of good that lacks close substitutes and accounts for a large portion of the consumer's income, serving as an exception to the Law of Demand.

Veblen Good

A certain type of luxury good that violates the Law of Demand.

Consumer Behavior

The study of how people and groups choose, get, and use things to meet their needs.

Need Recognition

The first stage of the Consumer Behavior Decision-Making Process in which the consumer recognizes a problem or need.

Information Search

The second stage of the Consumer Behavior Decision-Making Process where the consumer searches for information.

Evaluation of Alternatives

The third stage of the Consumer Behavior Decision-Making Process where the consumer compares competing brands and products based on key attributes.

Purchase Decision

The fourth stage of the Consumer Behavior Decision-Making Process where the consumer decides which product to buy, as well as where and when.

Post-purchase Behaviour

The fifth stage of the Consumer Behavior Decision-Making Process where the consumer uses the product and evaluates their satisfaction.

Psychological Factors (Consumer Behavior)

Internal factors influencing consumer behavior, including motivation, perception, learning, and attitudes and beliefs.

Motivation (Consumer Behavior)

The driving force behind consumer purchases.

Perception (Consumer Behavior)

How consumers interpret product information.

Learning (Consumer Behavior)

How experience shapes consumer preferences.

Social Factors (Consumer Behavior)

External influences from surrounding people, including family, reference groups and social networks, and roles and status.

Cultural Factors (Consumer Behavior)

Shared values, beliefs, customs, and practices of a particular group or society, comprising culture, subculture, and social class.

Personal Factors (Consumer Behavior)

Individual characteristics including age and life cycle stage, occupation, income, lifestyle, personality, self-concept, and gender.

Economic Factors (Consumer Behavior)

Financial determinants of purchasing power including personal income, family income, consumer credit, liquid assets, savings, and general economic conditions.

Technological Factors (Consumer Behavior)

Influences on consumer choices including digital influence, data and analytics, and real-world technology applications.

Law of Supply

A principle stating that as price increases, quantity supplied increases, and as price decreases, quantity supplied decreases, ceteris paribus.

Economies of Scale (Supply Exception)

An exception to the Law of Supply where a producer becomes large enough to reduce the production cost of goods and services.

Shift in Business Plan (Supply Exception)

A temporary increase in the supply of products at a low price to eliminate remaining stock and raw materials.

Competitive Pricing (Supply Exception)

A situation where businesses increase the supply of their products while reducing the price to capture market share.

Expiring or Dated Goods (Supply Exception)

An instance where a business increases supply early before the goods become unsellable.

One-of-a-kind Goods (Supply Exception)

Goods whose supply cannot expand even if the price increases.

Inelastic Supply

A supply condition where it is difficult to quickly adjust supply even if the price rises.