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Objective 3.01

Objective 3.01

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Published by heatherhaymer

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Published by: heatherhaymer on Jul 12, 2011
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10/05/2013

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CONTENT/TEACHING OUTLINECOMPETENCY:
3.00 Explain economic foundations relevant to the sports andentertainment marketing industry.
OBJECTIVE:
3.01 Explain the concept of economics.
Sports and Entertainment Marketing ISummer 200338
A. Explain economics and identify basic economic resources.1. Economics is the study of how to meet unlimited wants and needs of a societywith its limited resources.2. Resources include all things used in producing goods and services.3. Economic resources are land, labor, and capital resources that can be used toproduce the goods and services that people consume.a. Land, also known as a natural resource, includes everything contained in theearth and found in the sea.b. Labor, also known as human resources, includes all workers in the economy,including full- and part-time workers, managers, public employees, andprofessional people.c. Capital includes the money needed to start and operate a business, as wellas goods used in the production of other goods. Capital resources can belimited because they deteriorate through use or are of poor quality. Forexample, machinery such as an oven at a pizza restaurant.4. Scarcity is a condition in which more goods and services are desired than areavailable. Scarcity forces people, businesses and nations to make choices.Unlimited wants with limited resources results in scarcity.5. Economic goods are tangible items. For example, a television or baseball bat.6. Economic services are intangible. For example, going to a play or attending abaseball game.7. Entrepreneurship incorporates the skills of people who are willing to take the riskof starting their own business. Entrepreneurs organize economic resources inorder to create goods and/or services needed and desired in an economy.B. Describe the five economic utilities.1. Utility refers to the added value or usefulness of a product.2. Five types of economic utility.a. Form utility is the value added by changing raw materials or putting partstogether to make them more useful. For example, wood for a baseball bat.b. Place utility is the value added by having a product where customers can buyit. For example, selling movie tickets at the movie theatre.c. Time utility is the value added by having a product at a certain time of year ora convenient time of day. For example, selling lemonade at the VerizonAmphitheatre for a concert in the summer.d. Possession utility is the value added by exchanging a product for somemonetary value. For example, a consumer pays $25 for a t-shirt at a concert.e. Information utility is the value added by communicating with the consumer.For example, visiting the Meymandi Concert Hall website(www.meymandi.org) to find out information about upcoming events.
 
CONTENT/TEACHING OUTLINECOMPETENCY:
3.00 Explain economic foundations relevant to the sports andentertainment marketing industry.
OBJECTIVE:
3.01 Explain the concept of economics.
Sports and Entertainment Marketing ISummer 200339
C. Discuss the three basic economic questions and the role of the government of eachsystem.1. The three basic economic questions are:a. What goods and services should be produced?b. How should the goods and services be produced?c. For whom should the goods and services be produced?2. In a market economy, there is little government involvement in answering thethree basic economic questions; the market answers them. Consumers decidewhat should be produced. Businesses decide how products will be produced.The people who have the money to purchase products determine who willreceive them.3. In a command economy, the government answers the three basic economicquestions. The government officials or leaders decide what should be produced.The government runs the businesses and employs the workers. The governmentalso decides who will receive products.4. In a traditional economy, the system is based on the ways things have alwaysbeen done. For example, the Amish community and Indian Reservations.5. Mixed economies are not pure market systems, nor are they completelycontrolled by the government. They are a mix, or blend, of the two. Alleconomies presently are mixed economies.a. Capitalism. The people elect the government officials who represent theirconstituents’ interests. For example, the United States and Japan.b. Socialism. Although most socialist countries are democratic, the socialisteconomy has increased government involvement. The government tries toreduce the differences between the rich and the poor. The socialist model isbased on the welfare of the people. For example, France, Germany, andGreat Britain.c. Communism. Communist countries have a government that is run by onepolitical party and that party controls everything. People are assigned jobs.Students are told what type of schooling they will receive. For example, Cubaand North Korea.D. Explain supply and demand.1. Supply is the amount of goods producers are willing and able to produce and sellat a given price during a certain period of time. Producers prefer to supply whenthe price is high; this is known as a sellers’ market.2. Demand is a consumer’s willingness and ability to buy products at a given priceduring a certain period of time. Consumers prefer to buy when the price is low;this is known as a buyers’ market.3. The Law of Supply and Demand is an economic principle that states the supplyof a good or service will increase when demand is great and decrease whendemand is low.
 
CONTENT/TEACHING OUTLINECOMPETENCY:
3.00 Explain economic foundations relevant to the sports andentertainment marketing industry.
OBJECTIVE:
3.01 Explain the concept of economics.
Sports and Entertainment Marketing ISummer 200340
a. Elasticity is the degree to which demand for a product is affected by its price.For example, when the price of a Tampa Bay Buccaneers authentic jerseyrises by 10% the quantity demanded falls by 26%. Demand is price sensitive.b. Elastic demand refers to how changes in the price of a product affect demandfor that product. For example, when the price of a CD is reduced, demandmay increase.c. Inelastic demand refers to a condition in the market where changes in theprice of a product have very little affect on the demand for that product. Forexample, some people might be willing to pay any price for Super Bowltickets.4. Factors that affect the elasticity of demanda. Availability of substitutes. If a substitute is easily obtainable, demandbecomes more elastic. For example, Walt Disney World, SeaWorld Orlando,Universal Studios Orlando, and Busch Gardens Tampa.b. Brand loyalty. Many customers will only purchase a certain brand ofproducts. In general, they will accept no substitutes. In this situation,demand becomes inelastic. For example, fans of the Terry Labonte #5Kellogg’s Chevrolet Monte Carlo may be more likely to purchase Kellogg’sbrand breakfast cereals over any other brand.c. Price relative to income. When an increase in the price of a good or servicedoes not have a major impact on a customer’s budget, the demand is usuallyinelastic. When an increase in the price of a good or service has a majorimpact on a customer’s budget, the customer most likely will no longer buy aproduct. In this case, the demand is elastic. For example, luxury suitesversus general admission.d. Luxury vs. necessity (want vs. need). When a product is a necessity, demandis usually inelastic. When a product is a luxury, demand is most likely to beelastic. For example, season tickets to N.C. State football versus gas for yourvehicle.e. Urgency of purchase. If a purchase must be made immediately, demandtends to be inelastic. For example, front row tickets to Jimmy Buffett’s lastconcert.E. Identify the phases of a business cycle and the impact of each on the sports andentertainment industry.1. The business cycle is the movement of an economy through four recurringphases – prosperity, recession, depression, and recovery.2. Explain the phases of a business cycle.a. Prosperity (Peak)i. Highest period of economic growthii. Low unemployment

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