Introduction to Economics, Microeconomics, and Marketing

Vocabulary flashcards covering key economic and microeconomic concepts relevant to marketing, including definitions of core terms, laws, and applications in business strategy.

Economics

The study of how individuals, firms, and societies allocate scarce resources to satisfy unlimited wants.

Scarcity

The fundamental economic condition of limited resources and unlimited human wants, necessitating choice.

Microeconomics

The branch of economics that analyzes individual consumers, firms, and specific markets.

Macroeconomics

The branch of economics that examines the overall economy, including GDP, inflation, and national income.

Utility

The satisfaction or benefit obtained from consuming a good or service.

Demand

Consumers’ willingness and ability to purchase goods or services at various prices.

Supply

Producers’ willingness and ability to offer goods or services for sale at various prices.

Law of Demand

As the price of a good decreases, the quantity demanded increases, ceteris paribus.

Law of Supply

As the price of a good increases, the quantity supplied increases, ceteris paribus.

Market Equilibrium

The point where quantity demanded equals quantity supplied; the market-clearing price.

Equilibrium Price

The specific price at which market equilibrium occurs.

Price Elasticity of Demand (PED)

A measure of how responsive quantity demanded is to a change in price.

Elastic Demand

Demand that is highly responsive to price changes, typical for luxury or non-essential goods.

Inelastic Demand

Demand that changes little when price changes, typical for necessities like rice or medicine.

Marginal Analysis

Evaluating the additional benefits and costs of a decision, used to optimize pricing and production.

Consumer Behavior

The study of how individuals select, purchase, and use goods and services.

Producers/Firms

Economic agents that supply goods and services to the market.

Markets

Any arrangement where buyers and sellers exchange goods, services, or resources.

Prices

Monetary values assigned to goods and services, determined by supply and demand interaction.

Government Regulation

Policies such as taxes, subsidies, or price ceilings that influence market outcomes.

Pricing Strategy

A firm’s plan for setting product prices to meet marketing and financial goals.

Promotion Timing

Choosing when to run marketing campaigns to maximize impact on demand.

Market Trends

Patterns or movements in market data that indicate the direction of consumer demand and competition.

Competition

Rivalry among firms seeking to attract customers and achieve market share.

Data-Driven Decisions

Business choices based on analysis of quantitative and qualitative information.

Cost-Effective Pricing

Setting prices that cover costs while delivering perceived value to consumers.

Predicting Market Trends

Using economic indicators and data analytics to anticipate future changes in demand and supply.

Irrational Consumer Behavior

Purchasing actions that deviate from purely logical or economic self-interest, limiting model accuracy.

Social and Cultural Influences

Non-economic factors such as traditions, values, and norms that affect consumer choices.

Real-Time Pricing Algorithms

Automated systems (e.g., Amazon) that adjust product prices instantly in response to market data.