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Economy > Test 5 > Flashcards

Test 5 Flashcards

0
Q

4 Types of Consumers

A
  1. Individual
  2. Businesses
  3. Government
  4. Exports
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1
Q

Consumer

A

Anyone who buys goods or services for personal use

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2
Q

What is required in order to consume?

A

Income

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3
Q

Sources of Income

A
  1. Income From Work

2. Income From Wealth

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4
Q

Two Types of Income From Work

A
  1. Wage

2. Salary

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5
Q

Wage

A

Earnings paid by the hour

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6
Q

Salary

A

Earnings paid on a weekly or monthly basis

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7
Q

Wealth

A

The value of things that you own

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8
Q

Where does wealth come from?

A
  1. Interest

2. Rent

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9
Q

What can you do with your wealth?

A
  1. Savings

2. Spending

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10
Q

Factors That Influence How Much We Save

A
  1. Wealth
  2. Expectations
  3. Interest Rates
  4. Taxes
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11
Q

Factors That Determine How You Save

A
  1. Safety (your money’s safety)
  2. Rate of Return
  3. Liquidity
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12
Q

Number One Problem With Spending

A

Consumers can not afford everything they would like to own

Therefore they have to make choices

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13
Q

Average Propensity To Consume

A

The portion of a persons total income that they spent

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14
Q

Average Propensity To Save

A

The portion of a persons total income that they save

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15
Q

Marginal Propensity To Consume

A

The portion of the change of income that a person consumes

16
Q

Marginal Propensity To Save

A

The portion of the change of income that a person saves

17
Q

Paradox of Thrift

A

People saving more money individually equals less total income

18
Q

Multiplier Concept

A

All money that one spends becomes income to another

19
Q

Benefits of Advertising

A
  1. Provides Information
  2. Can result in lower prices
  3. Stimulates competition
  4. Stimulates demand
  5. It pays for the media
20
Q

Negatives to Advertisement

A
  1. Don’t inform
  2. Misleading
  3. Increases the cost of goods
  4. People buy products they don’t need
21
Q

Advertising Strategies

A
  1. Slogans/Jingles
  2. Rational Appeal (they rely on logic and reason)
  3. Emotional Appeal
22
Q

Types of Emotional Appeal

A
  1. Shock

2.

Economy (8 decks)

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