Marketing Study Guide Chp 2

The amount of money remaining from revenues after all expenses are paid - **Profit**

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The study of how goods and services are produced, distributed, and consumed - **Economics**

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The possibility of financial gain or loss or personal injury - **Risk**

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A report developed to predict the expenses to be incurred and revenues to be received - **Forecast**

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The business is legally responsible for damages - **Liable**

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Involves preventing, reducing, or lessening the negative impacts of risk - **Risk Management**

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The income that is distributed to investors- **ROI (Return on Investment)**

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A system of deciding what is right or wrong in a reasoned and impartial manner - **Ethics**

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The amount of satisfaction a person receives from the consumption of a particular product or service - **Economic Utility**

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A financial statement that shows a company’s assets, liabilities, and net worth at a specific point in time - **Balance Sheet**

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A plan for how available funds will be spent -**Budget**

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Shows revenues and expenses for a specific period of time reveals company’s profit or loss - **Income Statement**

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High standards of rules and guidelines - **Principles**

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Making decisions to use resources in ways that result in the greatest profit - **Profit Motive**

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**Macroeconomics** - the study of the economics of the entire society

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**Microeconomics-** the study of the relationships between individual consumers and producers

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**form utility -** when the physical characteristics of a product or service are improved

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**time utility-** making the product or service available when the customer wants it

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**place utility -** the product is available where it is wanted

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**possession utility -** the product or service is available at an affordable price and easily obtainable

**Natural Risk-** Weather, Natural Disasters

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**Human Risk -** Employees being bad

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**Economic Risk-** Loss of money

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**Gain Or Loss Risk- (speculative risk)**- There is a chance of loss or gain

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**Controllable Risk-** It can be controlled or prevented  (Opposite:Uncontrollable risk)

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**Insurable Risk-** When you are prepared for risk or losses and you can estimate and save money.

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**Risk Avoidance-** When you avoid risky situations from happening

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**Risk Insurance-** Having money or other financial ways to plan for a future risk that may happen.

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**Risk Transfer-** When you transfer a risk to another company. If someone gets hurt of something

bad might happen, the risk will go to others

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**Risk Retention-** Setting aside funds to help predict and loosen the loss of a risk in the future.

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